ERC orders PEMC to halt collection of congestion fees associated with Cebu-Negros cable outage

THE ENERGY Regulatory Commission (ERC) has directed the Philippine Electricity Market Corp. (PEMC) to suspend the collection of congestion charges and other fees triggered by an outage at a high-voltage submarine cable connecting Cebu and Negros.

“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 and Chief Executive Officer Agnes VST Devanadera said in a statement Wednesday.

The line had been severed in June by dredging works.

The commission also required PEMC to refund congestion and other fees collected between June and August within “a period equivalent to the number of months covered by the subject collections.”

The ERC added that it ordered PEMC to defer congestion payments and other applicable charges to generation companies affected by the incident.

The commission’s directives will take effect until the transmission line is completely restored or until the ERC comes up with a pricing solution and settlement.

In mid-June, the 138-kiloVolt Cebu Negros Line 1 was damaged by dredging carried out by the Department of Public Works and Highways on the Bio-os River in Negros Oriental.

“The damage to the line has consequently resulted in decreased transfer capacity of the Cebu Negros Submarine Cable, thus resulting in congestion that limits the available supply. Consequently, costlier diesel plants have been tapped to compensate for the load required, ultimately setting the marginal costs that define the current pricing in Negros and Panay,” the ERC said.

“As reported to the commission, significant increases in the electricity rates of consumers in the subject areas have been observed beginning in their June billing. The significant increases in electricity billings have been decried by many stakeholders in Panay and Negros as an unreasonable burden on consumers and businesses,” the ERC said. — Angelica Y. Yang