ERC suspends reserve market settlement

MANILA, Philippines — The Energy Regulatory Commission (ERC) has ordered the Philippine Electricity Market Corp. (PEMC) and the Independent Electricity Market Operator of the Philippines Inc. (IEMOP) to suspend settlement amounts in the reserve market.

The suspension of the implementation of Section 8 on Billing and Settlement of the Price Determination Methodology (PDM) for the reserve market in the Wholesale Electricity Spot Market (WESM) covers the March billing period.

The ERC has ordered the submission of audit results from PEMC and IEMOP until April 15, and said evaluation to take place “likely in May 2024.”

“We cannot ignore the fact that there are issues arising from the implementation of the system as currently designed that puts to question the resulting rates,” ERC chairperson Monalisa Dimalanta said.

“We are strictly requiring PEMC and IEMOP to submit the audit results of the software so we can identify and address these issues and immediately resume normal operations of the market,” Dimalanta added.

ERC said IEMOP reported significant price increases for the month in reserve costs compared to February.

“This significant price increase will impact the total price of electricity that will be charged to the public,” the ERC said in a statement.

The ERC previously directed PEMC and IEMOP in February to comply with requirements, including results of the software audit for the system for billing and settlement and the systems for the management of the reserve market.

According to the ERC, PEMC and IEMOP have yet to comply with the directives on the submission of the results.

The ERC said it raised concerns on the “reasonableness of such cost increases,” including the mechanics of co-optimization in light of existing policies and regulation.

Meanwhile, IEMOP corporate planning and communications manager Arjon Valencia said billings and settlements are suspended effective this March “until further notice.”

IEMOP has yet to release a statement as providers need to comply first with the reportorial requirements by ERC, Valencia added.