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ERC to PEMC: Explain high rental charges on Iloilo power distributor


The Energy Regulatory Commission (ERC) has ordered Wholesale Electricity Spot Market (WESM) regulator Philippine Electricity Market Corp. (PEMC) to explain the high rental payable of Iloilo City’s power distributor MORE Electric and Power Corp.

In a letter to PEMC, ERC chairman Agnes Devanadera compelled the WESM regulator to submit the breakdown of the computation of the line rental payments of MORE for billing month of July 2021 “in comparison to the period prior to the submarine cable breakdown and the same period in 2019 and 2020.”

The ERC’s inquiry stemmed from MORE’s concern that its line rental payables in July amounted to P66,156,307.84, “which would translate to P1.5353/kWh price hike for its residential consumers.”

In its letter to the ERC, MORE observed numerous "extreme" price separation attributable to the incident happened to one of the 2x90 megawatts circuits of the National Grid Corp. of the Philippines’ (NGCP) submarine cable between Cebu and Negros that limits the flow of power supply between islands.

The incident happened during the dredging activities of the Department of Public Works and Highways on June 15.

“The limitation in supply was further aggravated by the Preventive Maintenance of Palm Concepcion Power Corporation located in Panay Island. This extraordinary market condition might extend until next year pending the repair of the damaged submarine cable of the National Grid Corporation of the Philippines,” the company said.

With the increase in its line rental payables to WESM, MORE is projecting that its generation charge will increase by 76% in September after hitting a record low of P3.55/kWh in July 2021.

“Unfortunately, this effort of MORE is now being challenged by the line rental and congestion charges that were brought about by an incident over which MORE Power had no fault or participation,” the company said.

“Further, the nodal price of MORE surged to as high as P45/kWh which deviates from the permanent price cap of P32/kWh set by the Energy Regulatory Commission for the protection of the consumers,” it said.

MORE said the “extreme price hike” in WESM is projected to continue until December, pending complete repair of the NGCP's damaged submarine cable.

“This means another unbearable four months for the paying consumers just because of the underwater mishap of the DPWH's operator," it said.

The Iloilo Business Club, meanwhile, urged the ERC to look into MORE’s concerns to “ensure that Ilonggo consumers do not suffer from the consequences of the incident especially at this time of pandemic.”

In response to MORE’s letter, ERC ordered PEMC to provide within three days from receipt thereof, its input on the inquiry of MORE with regard to the non-imposition of the price substitution methodology (PSM) during the period where issues on the NGCP line were encountered.

To recall, MORE took over as the sole power distributor in Iloilo after the franchise of Panay Electric Company (PECO) — previously the sole operator in the City — expired on January 19, 2019.

Following this, the Energy Regulatory Commission (ERC) revoked PECO’s certificate of public convenience and necessity (CPCN).

Iloilo City Mayor Jerry P. Treñas revoked PECO's business permit after the company lost both its franchise and CPCN.

The ERC in March 2020 stood firm that MORE is the sole power distributor in Iloilo City, taking over from PECO.

Meanwhile, the Manila Electric Co. hiked its rates in July, marking the fourth straight month of increases.—LDF, GMA News

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