DOE seek stakeholder opinion on Causer Pays Mechanism

DOE logo 2023

The Department of Energy (DOE) is seeking the opinions of stakeholders on its plan to implement a Causer Pays Mechanism (CPM).

In a report by the Philippine Star, the DOE said that the CPM would utilize the reserve responsibility share (RRS) formula to establish each Wholesale Electricity Spot Market (WESM) member’s share factor as well as contribution to each type of ancillary services (AS).

CPM is a proposition where the cost of AS would be assumed by the WESM members following the utilization of the service.

This would cover transmission network service providers (NSP), generation companies, and WESM customers.

Furthermore, the RRS of every generation company would be determined by the market operator (MO) using a “runway model”.

This would be predicated on the dependability and efficiency of generation companies as well as real-time dispatch schedule, meaning the costs of primary reserves would be recouped from generation firms with a registered capacity of around five megawatts (MW), while consumers and generating businesses would be the source of secondary and tertiary reserves.

Additionally, Distribution Utilities (DUs) would be responsible for covering the expenses of reactive power supports.

Meanwhile, black start expenses would be recouped from customers, transmission NSPs, and generational firms. The cost of must-run units would also be acquired from customers and generation companies at the same time.

The DOE also stated that the Energy Regulatory Commission (ERC) must issue any appropriate regulations, should there be any, within 60 days to enable the CPM to be implemented.