ERC Allows Collection of 70% Deferred Payments to Reserve Providers

PASIG CITY—The Energy Regulatory Commission (ERC) has approved the collection of the seventy percent (70%) recalculated Reserve Trading Amounts (RTAs) starting in the billing period of January next year.

The decision came following the Commission’s deliberation on submission by the Independent Electricity Market Operation of the Philippines (IEMOP)’s of the recalculation of RTAs for the billing months of February and March 2024.

It may be recalled that on 26 March 2024, the ERC suspended the implementation of the billing and settlement in the co-optimized energy and reserve in the WESM due to concerns on the implementation of the Price Determination Methodology (PDM) provisionally approved by the Commission. The initial amount submitted by the National Grid Corporation of the Philippines (NGCP) for billing and collection was more than PhP9.1 Billion. After the suspension and upon further review, IEMOP recalculated the amounts due for February and March 2024 resulting in PhP8.8 Billion. The Commission then allowed the collection of thirty percent (30%) of this amount on 09 May 2024.

The ERC then lifted on 26 July 2024 the suspension and allowed the resumption of full operations of trading of reserves in the WESM for contracted and merchant plants. In the Order, the Commission directed the IEMOP to recalculate the resulting reserve trading amounts for the billing periods of February 2024 and March 2024 and adjust the value for the remaining 70% for the March billing month.

The Commission likewise mandated the system operator, the National Grid Corporation of the Philippines (NGCP), to harmonize the timeline of its submission of non-compliances to the IEMOP. The IEMOP’s recalculated submission was based on the non-compliance data provided by NGCP. As a result, the reserve trading amounts were further recalculated and, after deducting the values of the non-compliances, was reduced by PhP725 Million. Thus, the total amount that remains to be collected from consumers stand at around PhP3.05 Billion.

This amount will be collected over a staggered period of three (3) months for trading participants in the Luzon and Mindanao Wholesale Electricity Spot Market (WESM), and six (6) months for those in the Visayas. The corresponding rate impact will be PhP0.124/kWh for Luzon and Visayas, while Mindanao will have a lower rate impact of PhP0.033/kWh. ###