ERC launches PSA caravan in Laoag
BY LENIE LECTURA – NOVEMBER 17, 2022
from Business Mirror
The Energy Regulatory Commission (ERC) has launched a PSA (Power Supply Agreement) Caravan in Laoag, Ilocos Norte to gain a good understanding of the challenges encountered by the distribution utilities (DUs) and consumers.
The PSA Caravan will be held in strategic locations to cover all the regions of the country. After Laoag, the agency is set to visit Cagayan de Oro and Iloilo.
The nationwide rollout of review of PSAs led by the ERC, together with the Department of Energy (DOE), is meant to assist electric cooperatives to explore and formulate immediate and mid-term measures to address the high cost of electricity in the country.
“The PSA Caravan is the ERC’s grassroots-based efforts to evaluate primarily the generation component of consumers’ electricity bills,” said the agency.
Generation charge constitutes almost 60 percent of the power bill and accounts for the cost of power generated and sold to DUs by generation companies under PSAs or through the Wholesale Electricity Spot Market (WESM) which the utilities then supply to their captive customers.
As of August this year, generation charges have increased by more than 20 percent compared to 2021 generation charges across Luzon, Visayas and Mindanao. The generation rate increase is driven mainly by the pass-through component of the rates for the cost of fuel, specifically coal, and the upward adjustment in foreign exchange rate.
“The PSA caravan is here so we can look at your PSAs and find immediate and long term solutions for the DUs to be able to sustain themselves and for the consumers also to enjoy lower electricity rates.
This is an industry wide concern. That’s why we as regulators are now taking a proactive stance, and we are so happy that our new Chairperson Mona Dimalanta came up with this caravan. This is the first of its kind and we are happy to meet you all personally and for us to discuss on the table, the possible remedies that we would undertake,” said ERC Commissioner Alexis Lumbatan, who leads the ERC delegation in Laoag.
The ERC delegation, composed of representatives from the offices of the commissioners and from different units involved in the evaluation of the PSA, was joined by the DOE representatives. Together, DOE and ERC collaborated in addressing the concerns of the various ECs.
The ERC said the open forum brought out a significant number of insights and best practices that garnered productive exchange of possible solutions from the participant ECs.
The ECs that participated in the Caravan include Central Pangasinan Electric Cooperative Inc., Ilocos Norte Electric Cooperative Inc., Ilocos Sur Electric Cooperative, Pangasinan III Electric Cooperative Inc., Abra Electric Cooperative Inc. and Mountain Province Electric Cooperative Inc.
