ERC lowers power rates for Luzon and Mindanao

Business World Online

Posted on 12:14 AM, December 03, 2010

ELECTRICITY consumers in Luzon and Mindanao can expect lower electricity bills for the next nine months as regulators have ordered National Power Corp. (Napocor) to refund excess charges related to foreign currency exchange movements.

Consumers in the Visayas, however, should expect an increase in electricity bills.

The Energy Regulatory Commission (ERC), in a decision dated Nov. 15 and released only yesterday, said rates in Luzon should be lowered by P0.34 per kilowatt-hour (kWh) and in Mindanao by P0.26/kWh every month for the next nine months.

Rates in the Visayas, however, should be raised by by P0.09/kWh every month over 20 months.

The adjustments should start in the next billing period, ERC Executive Director Francis Saturnino C. Juan told BusinessWorld.

The ERC noted, in its decision regarding Napocor’s Incremental Currency Exchange Rate Adjustment (ICERA) petition, that some of the state-owned power firm’s assets had already been privatized and yet it still claimed foreign currency adjustments for plants already sold.

"Based on our calculations, it was found that Napocor over-recovered in Luzon and Mindanao for the period that we covered, which is from January 2007 to June 2009," Mr. Juan said.

Napocor officials were not immediately available for comment.

Based on ERC computations, Napocor should refund foreign exchange over-collections of P6.58 billion for Luzon and P1.71 billion for Mindanao, and collect P800.5 million in the Visayas as of June 2009.

The ERC allows Napocor to reclaim costs arising from foreign exchange movements under the ICERA mechanism.

The latest adjustment covers the 9^th to 14^th ICERA adjustment petitions -- covering January 2007 to June 2009 -- filed by Napocor and the Power Sector Assets and Liabilities Management Corp., the state agency in charge of privatizing the government’s power assets. -- ENJD