Power distributors ordered to refund regulatory reset cost

By Alena Mae S. Flores – July 04, 2019
from manilastandard.net

The Energy Regulatory Commission ordered all privately-owned electric distribution utilities to refund the so-called regulatory reset cost, with corresponding interest, to power consumers.

It said the one-time refund should take effect immediately in the July 2019 billing period.

Under the performance-based regulation methodology, privately-owned DUs are allowed to charge RRC in their revenue requirement. RRC represents expenses incurred in engaging regulatory experts or consultants when setting and updating the DU’s electricity rates.

“The commission is of the view that the cost of regulation should be at the expense of the government and should not be a burden to the electricity consumers,” said ERC chair Agnes Devanadera.

“The amount collected as regulatory reset cost for the 3rd regulatory period remained unused and inasmuch as the 17th Congress appropriated funds for purposes of regulatory reset, the commission deems it prudent to refund the amounts collected by DUs for this purpose. In directing the refund, private DUs’ customers will be benefitted by the said regulatory reset cost refund,” she said.

Based on ERC’s calculation, the RRC refund ranges from P0.04 to P0.08 per kWh.

ERC said that in the case of Meralco, customers could expect at least a P0.0731-per-kilowatt-hour refund in July.

Distribution utilities were also asked to submit a report on their compliance with the particular refund directive of the ERC which would be subject to the audit and review in the next regulatory reset to determine if further refunds are in order.

“Electricity consumers of privately-owned distribution utilities are advised to check their electricity bills next month and find out if the regulatory reset cost refund has been effected, including any relevant interest earned thereon,” Devanadera said.