ERC probes alleged ‘overpricing’ of power utilities
By Myrna M. Velasco – December 8, 2022, 8:27 AM
from Manila Bulletin
The Energy Regulatory Commission (ERC) is investigating private distribution utilities (DUs) and electric cooperatives (ECs) that have been the subject of complaints for allegedly overpricing pass-on costs to consumers, primarily on generation charges.
The commission said they are prioritizing the probe based on 63 letter complaints filed or received through the Department of Energy (DOE) and Office of the President (OP).
According to the regulatory body, it has been looking into the “accuracy and reasonableness of the generation rates being passed on by distribution utilities to its consumers.”
ERC Chairperson Monalisa C. Dimalanta indicated that in the course of ERC’s monitoring of monthly submissions from PUs (private utilities) and ECs of their generation charges, “we have identified the need to conduct a more thorough validation of the passed-on or pass through charges under certain PSAs (power supply agreements).”
The passage of the Electric Power Industry Reform Act (EPIRA) in 2001 was seen to usher in cheaper electricity rates but power rates continued to swell instead within the 20 years of its implementation.
To recall, one of the campaign promises of President Ferdinand Marcos Jr. is to guarantee cheaper electricity rates to be paid for by Filipino consumers.
The ERC, under the Marcos administration, has already started scrutiny of the various PSAs entered into by DUs with the power suppliers, as these account for the biggest chunk (at more than 50-percent) of the cost pass-on in the power bills.
The industry regulator said its move on probing the DUs had been prompted by “the recent increases in electricity rates and the numerous complaints received from consumers.”
The ERC will require DUs to substantiate the charges reflected by DUs in their bills and to validate the complaints of consumers. DUs will submit among others, documents to support the detailed calculation of fuel charges that account for a significant portion of the increases in electricity rates since January 2022.
The Commission added it will “confirm whether the charges pass-on to the consumers are only eligible costs and there are no hidden and extraordinary charges.”
Since consumer-protection is among the mandates vested upon the industry regulator, the ERC emphasized that if findings will show any exorbitant collection, concerned DUs will “refund the excess amounts collected but may also be imposed appropriate penalties when warranted.”
The EPIRA similarly decreed that the industry regulator shall enforce “transparency and reasonable prices of electricity.”
