DOE to review pass-on power charges

By Lenie Lectura - November 6, 2017
https://businessmirror.com.ph/doe-to-review-pass-on-power-charges/

A recent decision of the Energy Regulatory Commission (ERC) that allowed an electric cooperative (EC) to pass on to its customers P232 million worth of unpaid power fees owed to a power supplier has prompted the Department of Energy (DOE) to conduct a review on pass-on power charges.

Energy Secretary Alfonso G. Cusi said his agency is crafting a circular that will prohibit ECs and distribution-utility firms (DUs) from passing on charges to consumers “due to their inefficiencies and negligence.”

“We are revisiting all the pass- through expenses so that there will be a limit on what to pass and what not to pass on to consumers. The pass-through expenses brought about by inefficiency on the part of the EC should not be passed on to the consumers,” Cusi said.

He added the DOE would not allow consumers to be burdened by inefficiencies caused by, among others, over-contracting on the part of an EC.

“There is an issue in Bacolod. The ERC approved it. If it’s due to over-contracting, then why allow consumers to pay for it?” Cusi said.

The ERC has allowed the Central Negros Electric Cooperative (Ceneco) to pass on to its consumers P232 million of unpaid fees it owes to Kepco-Salcon Power Corp. for the period July 2011 to November 2013.

Ceneco was authorized to recover from its consumers the said amount at a monthly rate of P0.0817 per kilowatt hour (kWh) for a period of 50 months, or until such time that the full amount is fully recovered.

“Over-contracting is just one example of inefficiency. How can we encourage efficiency if we pass the burden to consumers? That’s why we need to review through a department circular these pass on charges so that we can refine our policies,” Cusi said.

There is also a proposed bill that seeks to prohibit electricity distributors from passing on other charges to consumers: nontechnical system losses caused by electricity theft or pilferage and the electricity company’s own power expenses.

“Consumers should not be made to pay for what is ultimately the responsibility of distribution utilities and electric cooperatives. It is time for us to prioritize the welfare of Filipino households over the interests of power-sector insiders,” said Sen. Sherwin T. Gatchalian, the bill’s author and chairman of the Senate Committee on Energy.

Senate Bill 1188, or the proposed Recoverable System Loss Act, lowers the system-loss cap—the maximum charge that can be passed on to consumers to compensate for electricity lost in the distribution system from the receiving point of private-distribution utilities and ECs to the consumer’s metering point—from 8.5 percent to 5 percent for distribution utilities, and from 13 percent to 10 percent for electric cooperatives.

If passed into law, Gatchalian said consumers could save as much as P386 million per month in electricity costs.