ERC exploring ways to lower power rates via review of co-ops’ supply agreements

By Ashley Erika O. Jose – November 16, 2022 | 8:34 pm
from Business World

THE Energy Regulatory Commission (ERC) said it is reviewing power supply agreements (PSAs) entered into by electric cooperatives to see whether there is leeway to reduce power rates.

“We can look at PSAs (to) find immediate and long-term solutions for the DUs (distribution utilities) to sustain themselves and for the consumers also to enjoy lower electricity rates,” ERC Commissioner Alexis M. Lumbatan said in a statement on Wednesday.

In a statement, the ERC said the review, which it calls the “PSA Caravan,” is focused on the generation component of power bills, which accounts for about 60% of what consumers pay.

The ERC said generation charges in August were up about 20% from a year earlier.

“The generation rate increase is driven mainly by the pass-through (non-fixed) component of the rates for the cost of fuel, specifically coal, and the upward adjustment in foreign exchange rate,” the ERC said.

In October, the ERC said that about 50 distribution utilities are under evaluation for not providing a breakdown of their generation charges.