Participants in the Wholesale Electricity Spot Market were found evading payments of fees in the sale of electricity, which the Philippine Chamber of Commerce and Industry (PCCI) wanted the government to probe.
The largest trade organization in the country has called on the Energy Regulatory Commission (ERC) and the Independent Electricity Market Operator of the Philippines (IEMOP) to collaborate in rooting out irregularities in the spot market.
The issue was raised when the PCCI officials with IEMOP acknowledged the challenges posed by defaults of some WESM participants, which affect the full settlement of receivables of compliant WESM participants.
Skipping the dues undermines the integrity of the spot market and unfairly burdens compliant participants, PCCI said.
“These defaults distort market signals and expose law-abiding market players to significant financial risk. Imposing the burden on compliant WESM members effectively penalizes those who fulfill their financial obligations while relieving delinquent members of their responsibility,” PCCI said in a statement on Sunday.
“Ultimately, the costs resulting from defaults are passed on to consumers through higher electricity prices or market fees,” PCCI added.
Further, the PCCI also urged IEMOP to fully exercise its authority under the WESM rules to protect market integrity and prevent the undue subsidization of non-compliant members by those in good standing.
Under WESM Rules, IEMOP has the authority to suspend or remove defaulting market participants, citing specific provisions that empower the spot market to issue default and suspension notices and pursue deregistration if financial obligations remain unfulfilled.
“IEMOP should implement a policy framework that ensures defaulters are held accountable and that compliant members are protected from bearing the cost of others’ failures,” PCCI stressed.
Transparent billing proposed
PCCI also urged ERC to seek greater transparency in the billing, particularly regarding WESM-related charges for contestable customers.
The PCCI proposed that electricity bills include WESM charges, such as energy transactions, line rentals, feed-in tariff components, and net settlement surplus allocations.
The group stated that contestable customers, now encompassing a broader base under the expanded Retail Competition and Open Access, should have a better understanding of how charges are calculated.
“Contestable customers deserve clarity and fairness in their electricity billing. Transparent WESM-related charges will allow them to make informed decisions and promote greater competition in the energy sector,” PCCI said.
PCCI stressed fair enforcement of rules and transparent billing practices are essential to build a more accountable and efficient power sector.