Republic of the Philippines


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ERC Slashes PEMC’s Market Transaction Fees, Orders Refund of Over Collection

The Energy Regulatory Commission (ERC) recently approved with modification the application of the Philippine Electricity Market Corporation (PEMC) for the approval of the level of Market Transaction Fees (MTFs) for Calendar Year (CY) 2015 for the Philippine Wholesale Electricity Spot Market (WESM).  In its 78-paged Decision, the ERC slashed the PEMC’s proposed MTF level in the amount of Eight Hundred Ninety-Six Million Four Hundred Ten Thousand Pesos (PhP896,410,000.00) by almost half thereby allowing it to impose the MTF for the subject calendar year in the amount of Four Hundred Forty-Seven Million Four Hundred Seventy Thousand Twenty-Six Pesos and Six Centavos (Php447,470,026.06) on WESM participants in the Luzon and Visayas Grids.

“In our evaluation, the Commission found that there are certain Market Transaction Fee components that are unnecessary and unreasonable and there are those that PEMC failed to provide supporting documents that would justify the reasonableness thereof. Moreover, we have established that PEMC is a Government-Owned and Controlled Corporation (GOCC) being a non-stock corporation whose functions are impressed with public interest.  As such, we have evaluated PEMC’s application on the basis of such GOCC classification”, ERC Chairperson and CEO Agnes VST Devanadera explained.

The ERC, in its evaluation also found that PEMC’s actual budget utilization of certain items is lower than the proposed budget for the same.  Thus, the ERC approved certain MTF components based on the actual expenses incurred by PEMC.  

“We are directing PEMC to refund its over collection in the Market Transaction Fee for the 2015 Calendar Year to be apportioned among all the Luzon and Visayas participants.  The adjustment shall be implemented over twelve (12) months beginning in the next billing month upon receipt of the subject Decision, and shall be reflected as a separate line item in the WESM monthly billing statement.  PEMC shall submit its Plan of Action for the implementation of the refund scheme, and the corresponding adjustment to the Market Transaction Fee, within ten (10) days upon receipt of the Decision”, ERC Chairperson and CEO Agnes VST Devanadera concluded.


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