Meralco wants WESM generation charges recomputed

MANILA, Philippines – Manila Electric Company (Meralco) has filed a motion before the Energy Regulatory Commission (ERC), asking the regulator to order the electricity spot market operator to recompute generation charges for November and December 2013.

This after recent reports that some power producers violated rules of the Wholesale Electricity Spot Market (WESM), causing a spike in prices.

“We are asking ERC to review the WESM market pricing for the period November and December 2013 in view of information that were revealed during the Senate and House hearing that certain power plants have violated WESM rules when they did not comply with must-offer rule or when they offered but were not dispatched,” said Meralco legal head William Pamintuan.

Congress is probing Meralco’s record-high P4.15 per kilowatt-hour rate hike in December that was meant to recover generation costs. Generation charges spiked as Meralco was forced to bought expensive power from WESM following the shutdown of the Malampaya gas facility and unscheduled outages of other plant suppliers.

In its 12-page Omnibus motion with manifestation on February 3, Meralco asked ERC to direct WESM operator Philippine Electricity Market Corporation (PEMC) “to conduct market reruns or recalculations of WESM transactions and dispatches, or determine substituted prices or undertake any other appropriate measures to determine and recalculate the true cost of electricity in the WESM during the November and December 2013 supply months (Meralco’s December 2013 and January 2014 billing months) under such rules or guidelines as the Honorable Commission may deem appropriate.” (READ: Meralco decries arbitrary WESM bids)

The true cost, Pamintuan noted, may have been lower than what PEMC and power generating companies billed Meralco.

“Market reruns will facilitate the determination of the true cost of electricity with respect to WESM transactions for the November and December 2013 supply months, without the distorting effect of the full available capacity of power plants not having been offered, or if offered at prices which were lower than had cleared, being dispatched and hence, setting clearing prices,” said Meralco in its motion.

Meralco cited the 610-megawatt Malaya Thermal power plant operated by state-run Power Sector Assets and Liabilities Management Corporation (PSALM) that did not run during the shutdown of Malampaya.

PSALM earlier said running the plant would have also translated to additional costs for consumers in the form of universal charges. (READ: Govt to use Malaya plant to ensure summer power supply)  – Rappler.com