ERC vows transparent process in its evaluation of WESM fees
Wednesday, February 15, 2006
Wed Feb 15,2006
The Energy Regulatory Commission (ERC) has assured industry stakeholders and the general public that it settles on a very transparent process in the deliberations and evaluation of the application on market fees for the Wholesale Electricity Spot Market.
In the wake of relentless questions hurled by consumer groups on various rulings handed down by the regulatory body, ERC chairman Rodolfo B. Albano, Jr. averred that the ERC "will remain standing in the middle, balancing the interests of all stakeholders of the electric power industry."
As it has already started public hearings on the Philippine Electricity Market Corporation’s application for trading fees at the spot market, the ERC chief noted that this will be subject to careful evaluation, so it would be in no doubt that the final ruling conforms with the WESM rules.
He explained that one critical balancing act the ERC shall uphold is the prescription under Clause 2.10.3 of the WESM Rules, mandating that to the extent practicable, the fees shall consider the budgeted revenue requirements of the Market Operator and the PEM Board, and "will not favor or discriminate against any category of WESM members, and the structure of the market fees is transparent."
The regulatory body held first round of public hearings on the proposed WESM fees last February 1. As proffered, the structure of the fees shall be categorized into two: The onetime market registration fee (MRF) paid on an annual basis by market participants; and the market transaction fees (MTF) to be charged on a per kilowatt hour (kWh) basis covering the total metered volume of electricity traded in the market.
The legal ground for the imposition of WESM fees is underpinned under Section 30 of the Electric Power Industry Reform Act (EPIRA) stating that "the cost of administering and operating the WESM shall be recovered by the market operator through a charge imposed to all market members"; that shall be approved by the ERC.
The WESM Rules stipulate that the market fees shall cover costs relating, but not limited to: registration fees; metering fees; billing and settlement fees; administration fees; and costs reasonably incurred by the PEM Board and its committees and working groups.
The registration fee is accounted to defray the registration of WESM members and will be assessed annually; and shall consider cost components, such as access or digital certificate, installation and configuration of the digital certificate, orientation and training, help desk facility and publications.
The transaction fee, on the other hand, shall cover expenses of market operator PEMC in running and governing the electricity spot market. Costs covered would list market operations, billing and settlements, administration and corporate services, PEM board and expenses of various committees constituted for the market, cost recovery in setting up the market management system (MMS) of the WESM and pre-operating loan cost recovery.
For the market transaction fees, PEMC proposed to raise total revenue of P549.555 million for 2006; translating to P0.01361 per kilowatt hour or P13.31 per megawatt hour; or if based on a reference trading volume of 50 MWh over 12 months it would cost P8,166.00.
PEMC department head for billing and settlement Eduardo B. Buhain explained that the budgeted market fees for 2006 does not include yet the payments or provisions for the recovery of the development cost for the MMS, which was a loan from the Asian Development Bank (ADB) with a co-financing by the Japan Bank for International Cooperation; with the National Power Corporation (NPC) serving as the borrower of record.
Under the loan covenants for the WESM project funding, the repayment period is due yet by 2009 and will wind up in 2022. (MMV)
posted by philpower @ 10:01 AM,
