Question & AnswerQ&A (Resolution NO. 01, S. 2018)
The main objectives include ensuring transparent and reasonable electricity prices, protecting public interest affected by electric rates and services, providing a mechanism for just and equitable distribution of NSS, and facilitating the immediate equitable flow-back of NSS to parties who paid for it.
These rules apply to Generation Companies, Distribution Utilities (DUs), End-users of electricity, Retail Electricity Suppliers (RES) including Local RES and Supplier of Last Resort (SoLR), Philippine Electricity Market Corporation (PEMC), and other relevant industry participants as applicable.
NSS is the settlement surplus remaining after all market transactions have been accounted for, including transmission line rentals to Network Service Providers, resulting from aggregate WESM settlement transactions due to locational marginal pricing accounting for losses and congestion in the transmission system.
NSS_k = Collectibles_k - Payables_k, where Collectibles_k is the total amount collected by the Market Operator from market participants including line loss and congestion charges, and Payables_k is the total amount to be paid to participants for energy transactions including line loss and congestion charges for trading interval k.
NSS is allocated to Direct WESM Members such as Distribution Utilities, Retail Electricity Suppliers, Generation Companies that acted as end-users, IPP Administrators, and other parties who paid line loss and congestion charges. Allocation is pro-rata based on each participant’s contribution to total line loss and congestion charge payments.
NSS allocated to DUs must be immediately redistributed to their captive End-users based on their consumption during the same billing period, effectively adjusting billed amounts to reflect the NSS redistribution.
PEMC must submit monthly summary reports on NSS or deficits generated and distributed, metered quantities, marginal line loss, congestion costs, VAT, and interests to Market Participants and ERC. An annual report comparing NSS levels over the year and analysis of factors must also be submitted. Additionally, PEMC must engage an external auditor for an annual audit of NSS and related procedures.
PEMC will be subject to interest imposed at the prevailing 91-day Treasury bill rate plus 300 basis points on the retained NSS amount until it is returned to WESM recipients as required.
The Energy Regulatory Commission (ERC) may impose fines and penalties pursuant to the Guidelines to Govern the Imposition of Administrative Sanctions under Section 46 of Republic Act No. 9136 for any violations or non-compliance with these Rules.
They take effect immediately starting the next billing month following their publication in the Official Gazette or a newspaper of general circulation in the Philippines and will continue until otherwise directed by the ERC.