Updated
By Myrna M. Velasco
On account of the
recent breakdown of power plants, the Department of Energy (DOE) said it will
further tighten the rules on the pass-on of different cost components in the
electricity bills of consumers – including the replacement power being secured
by generation companies (GenCos) when their facilities suffer forced outages.
Energy
Undersecretary Felix William B. Fuentebella said the pass-on policy was clearly
stipulated in the competitive selection process (CSP) rules being
institutionalized by the department.
He explained that when
GenCos will submit their bids to off-taker distribution utilities (DUs), they
are required to itemize all the charges that will eventually be billed to the
consumers – and if they fail to do that, they are prevented from enforcing the
pass-on of such costs.
“The CSP Rules signed
by Secretary (Alfonso) Cusi is emphasizing that policy — that all bids should
itemize pass-on costs. If they are not itemized in their bids with the DUs,
these cannot be passed on,” the energy official said.
Fuentebella expounded
“the purpose of that policy is to make sure that consumers are protected from
the ‘unseen’ pass-on costs.”
At the same time, the
DOE official noted that tightening such rules for all players could inject much
needed transparency as well as setting a level playing field for all
technologies.
Like in recent events
wherein question of replacement power had been raised due to the plants out
from the system because of unplanned shutdowns, cost impact on consumers relating
to the tight supply had turned out to be a pressing issue again.
Fuentebella
nevertheless intimated that the application of the ‘stricter policy on pass-on
costs’ will be prospective, therefore, it is not applied yet in the recent
circumstances in the industry.
Most of the GenCos are
claiming that their capacities are fully contracted and charges on replacement
power are not supposed to be passed on, but this remains to be seen when the
May billings of consumers in the Luzon grid will be dispatched.
Fuentebella qualified
it is the job of the Energy Regulatory Commission (ERC) to validate if the
claims and assertions of the GenCos of “no costs pass-on” are really enforced.
At least for future
power supply contracts that will be subjected to a mandatory competitive
bidding, he reiterated that all GenCos are required “to comply with the policy
that all pass-on items should be included in the rates in their bids – if it’s
not there, it cannot be passed on.”
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