The Independent Electricity Market Operator of the Philippines (IEMOP) clarified on Tuesday that payment defaults by customers on the Wholesale Electricity Spot Market (WESM) are not passed on to consumers.
WESM is a venue where distribution utilities (DUs) and electric cooperatives (ECs) procure a portion of their electricity requirements for their respective franchise areas. Electricity prices in the market fluctuate based on available supply and demand volume.
IEMOP issued the clarification following calls from the Philippine Chamber of Commerce and Industry (PCCI) urging both IEMOP and the Energy Regulatory Commission (ERC) to address instances of WESM members defaulting on payments for spot market transactions.
The market operator explained that unpaid amounts remain as receivables of generation companies and other sellers from DUs and ECs who sourced their power from the market.
“IEMOP has consistently enforced WESM rules, including the timely issuance of default and suspension notices, and the imposition of financial penalties,” the non-profit corporation said.
“These actions are guided by WESM rules and market manuals, which empower IEMOP to impose appropriate sanctions, including suspension and de-registration, when warranted.”
Such enforcement, it added, helps protect the interests of compliant market participants and safeguards market discipline.
Despite the clarification, IEMOP welcomed PCCI’s support for “a well-functioning and accountable electricity market,” and echoed the view that “all participants in the WESM must satisfy their financial obligations on time.”
IEMOP also backed PCCI’s call for greater transparency in the billing practices of Retail Electricity Suppliers (RES) to ensure a fair and reliable marketplace for all stakeholders.
Under the government’s Retail Competition and Open Access program, electricity customers with a monthly peak demand of at least 500 kilowatts over the preceding 12 months may choose their own RES and negotiate their power rates.
