The Energy Regulatory Commission on Wednesday ordered Philippine Electricity Spot Market Corp. to refund customers affected by congestion arising from the outage of the Cebu-Negros Submarine Cable covering the billing period of June to August.
ERC also directed PEMC to stop the collection of congestion and other applicable charges, including line rentals, attributable to the Cebu-Negros submarine cable damage.
It said PEMC, as the overseer of the Wholesale Electricity Spot Market, should stop the collections until the complete restoration and operationalization of the affected transmission line by National Grid Corp. of the Philippines, or until a more applicable pricing and settlement solution, was finalized by the commission.
“The commission is of the view that the congestion and other charges that are attributable to the damage of the Cebu-Negros submarine cable, which was not caused by the consumers, should not be charged to them,” ERC chairperson Agnes Devanadera said in a statement.
It directed the refund to be done in a period equivalent to the number of months covered by the subject collections.
It said the collection of two months’ worth of congestion and other applicable charges should be refunded within a period of no more than two months.
The ERC also directed PEMC to defer the payment of congestion and other applicable charges to generation companies affected by the subject incident until the complete restoration and operationalization of the transmission line, or until a more applicable pricing and settlement solution was determined by the agency.
The Cebu-Negros 138 kV Line 1 tripped on June 15, at 9:28 a.m. due to the damage caused by the Department of Public Works and Highways on one of the lines of the Cebu-Negros submarine cable during its conduct of an amphibious dredging in the mouth of Bio-os River in Barangay Pondol, Amlan, Negros Oriental.
The damage to the line resulted in decreased transfer capacity of the Cebu-Negros submarine cable, thus resulting in congestion that limited the available supply.
Costlier diesel plants were tapped to compensate for the load required, ultimately setting the marginal costs that define the current pricing in Negros and Panay. Electricity prices were also influenced by high line rental amounts due to congestion.
Significant increases in the electricity rates of consumers in the areas were observed beginning the June billing.
“The commission’s suspension of the collection of congestion charges and other charges that are attributable to the Cebu Negros Submarine Cable incident seeks to mitigate the impact of these developments on our consumers in the affected areas”, Devanadera said.