ERC to approve WESM fees, pricing this month
Wednesday, June 07, 2006
By MYRNA M. VELASCO
With the targetted commercial operation of the Wholesale Electricity Spot Market (WESM) next month, the Energy Regulatory Commission (ERC) indicated that it will target approval this June of the fees and pricing schemes that would govern transactions in the power pool.
But ERC chairman Rodolfo B. Albano, Jr. noted that this shall be done without sacrificing the processes involved in the issuance of resolutions or orders by the Commission.
Pending for action by the regulatory body include the application of the Philippine Electricity Market Corporation (PEMC) for price determination methodology (PDM), which shall determine the cost of electricity traded in the market.
The others are the market fees which shall cover charges for volumes transacted in the pool; and administered price cap in case of supply interruptions.
Noting that the regulatory body has always been aware of its timelines prescribed under the Electric Power Industry Reform Act (EPIRA), he reminded stakeholders that "there are certain procedures which need to be followed and other relevant matters which should be considered prior to any resolution by the ERC."
In light of reports criticizing ERC’s snail-pace process of rendering judgments on key applications and petitions tied to the reform processes for the power industry, he noted that the length of time they have been spending to study cases lodged before is just their way of "making sure that decision would be robust and would withstand any challenge by the stakeholders."
It would be noted that for several instances in the past, the rulings of the ERC have been overturned by the judicial branch; and where feasible, the regulators noted that they would want to avoid such instances.
The ERC explained that the PDM shall reflect the accepted economic principles of how energy will be priced in the WESM and "will provide a level playing field to all electric power industry participants."
Market fees, on the other hand, would relate to costs of administering and operating the WESM which shall be recovered by market operator PEMC through the charge to be imposed upon all market members.
The administered price will be imposed during market suspension and intervention to be used as basis for settlements, it was further noted.
"All three concerns need to be synchronized to ensure the effective and efficient operation of the WESM," the ERC said.
Ultimately though, Albano clarified that the successor failure of the power industry restructuring does not solely rely on the ERC, "but with the full cooperation of all the industry participants as well"; thus, appealing to stakeholders for a common-path effort in resolving the current dilemmas of the industry.
posted by philpower @ 12:20 PM,
