ERC mulls establishment of ‘rate affordability tracker’
BY MYRNA M. VELASCO – Mar 19, 2023 6:59 PM
from Manila Bulletin
The Energy Regulatory Commission (ERC) is seriously considering the establishment of ‘rate affordability tracker,’ so the Filipino consumers can be apprised on the measures as well as policy developments being pursued by the government and industry players on bringing down electricity tariffs in the country.
Via that propounded rate tracking platform, ERC Chairperson Monalisa C. Dimalanta indicated that “we can have an independent measure of the respective government initiatives and the effectivity of our programs and also a measure of information on the part of the consumers, so they can compel government officials to deliver on their mandated work.”
The ERC chief acknowledged that the Philippines has either the most expensive, or at times, second highest rate in the Asian region – and that has been a dilemma that the government has been failing to resolve since the passage of the Electric Power Industry Reform Act (EPIRA) more than two decades ago.
While she emphasized that some Asian neighbors have subsidized electricity rates, it cannot also be denied that their low or cheap power rates ushered them into industrialization and the multiplier effect to their citizens had been quality jobs, better opportunities in life; and their countries have been clinching recognition as ‘economic power’ in the global stage.
Conversely, that is an elusive goal that the Philippines cannot even get close to until this point; with its ranking in the Southeast region continuously slipping versus neighboring countries – and high electricity rates had always been blamed why those much-needed foreign direct investments (FDIs) are not coming.
Dimalanta stated what has to be weighed by the ERC in the proposed tracker will be the set of information to be provided – primarily those relating to: the affordability of the rates being billed; as well as the ‘least cost’ paradigm resulting from policies being enforced — including the well-intended goal of the competitive selection process (CSP) being administered by power utilities when they underwrite power supply agreements.
The ERC chief noted if there is a tracker, the consumers would be able to evaluate “what is the affordable rate that we want; and what can we consider as least cost?”
Factoring in all of the important elements and cost items in the final rates being billed, she pointed out that there should eventually be a ‘meeting point’ between what can be considered as ‘affordable’ as well as ‘least cost’ in the pockets of consumers.
She reckoned that if the ERC can develop that ‘affordability rate tracker’; then the consumers could have a legitimate venue on monitoring whether the government has been achieving anything on the promise of bringing down the costs being passed on to ratepayers.
For all types of end-users, it is very essential to track electricity rates and compare prices regularly because that will aid them in their decision when it comes to electricity consumption that will fit their budgets.
And for investors, electricity rate tracking is one parameter that will also guide their decision-making processes — whether they would prefer to inject capital in the Philippines, or will just bring their investments somewhere else.
Electricity rates can fluctuate throughout the year – and it is very common for power utilities to experience up and down electricity rates that they would be passing on from month to month.
By tracking these changes, end-users can take advantage of lower rates if these are available and these could yield savings in their monthly household budgets.
Nevertheless, if the rates of power utilities are high or relatively expensive compared to other industry players, then the consumers can have ready access to information that they can also use in raising questions, complaints or grievances to the policymakers or regulators.
