ERC bans service disconnection of customers
By Myrna M. Velasco – December 12, 2022, 2:39 PM
from Manila Bulletin
The Energy Regulatory Commission (ERC) has issued cease and desist orders (CDOs) to retail electricity suppliers (RES) so they could be prevented from issuing disconnection notices to the big-ticket customers they serve.
A parallel regulatory order has likewise been served to distribution utilities (DUs) as well as the Independent Electricity Market Operator of the Philippines (IEMOP), so they will not enforce service cut-off to RES customers.
Specifically, the ERC prescribed a “status quo”, while the motions to dismiss filed by the RES entities are being evaluated by the regulatory agency.
“During this period, the parties are required to observe the terms and conditions of their supply agreements,” the Commission stressed.
The regulatory body assured that consumers will have “continuous electricity supply pending the final resolution by the ERC by the issuance of the CDOs as part of the latter’s mandate to protect consumer interests.”
According to the ERC, it issued at least 13 CDOs to RES entities, as well as DUs and the IEMOP as operator of the Wholesale Electricity Spot Market (WESM) – although it has not specified which customers have been affected by threats of service disconnections.
The Commission indicated that the issuance of CDOs were enforced after the conduct of hearings which centered on “several petitions for dispute resolution filed by contestable consumers.”
Contestable customers belong to the segment of end-users within the prescribed thresholds (500 kilowatts and up) that can already negotiate and contract directly for their electricity service needs – and they are the ones served by retail electricity suppliers in the restructured power market.
The ERC noted that cases have been filed by consumers “due to differing interpretations by the parties on the propriety of the imposition by RES of fuel cost recovery adjustments (FCRA) or incremental fuel cost increase (IFCI).”
As contestable customers, their contracts “prescribed fixed rates but the adjustments are now being claimed unilaterally by their suppliers,” and they deemed such step to be “in violation of their supply contracts.”
The RES respondents, on the other, raised jurisdictional issues against the ERC, given the fact that the RES contracts are not within the regulation purview of the Commission.
On the part of the DUs and IEMOP, they are being impleaded because “the issuance of notices and the disconnections of service are performed by such parties.”
The ERC argued that under the Electric Power Industry Reform Act (EPIRA), it has the authority to issue CDOs, granting that this is done “after due notice and hearing,” adding that existing jurisprudence allows the agency to “issue provisional reliefs, such as injunctive reliefs on motion of the party in the case, or on its own initiative.”
