Published April 8, 2019, 10:00 PM By Myrna M.
Velasco
Filipino consumers are warranted
roughly P46.547 billion worth of refund in their electric bills once the Energy
Regulatory Commission (ERC) finally renders decision on adjustments in the
rate-setting methodology for power utilities in the country.
That has been the calculation
presented by Senate Committee on Energy Chairman Sherwin T. Gatchalian as to
the extent of transmission charge component of the bill that must be paid back
to consumers.
The last time the ERC updated the
performance-based rate setting (PBR) for power utilities was in 2010 – and
since then, the cost items in the building blocks already trended downwards,
including interest rates.
Regulated utilities like the
National Grid Corporation of the Philippines (NGCP) as well as distribution
utilities like the Manila Electric Company (Meralco) are similarly situated in
having rates that are no longer updated because of the delay in the regulatory
decisions of the ERC.
And if the entire cost of delay in
the rate approvals will be factored in, the numbers crunched by the Senate
energy committee on the magnitude of refund to consumers will be a staggering
P82.17 billion – which essentially may bring down electricity rates by as much
as P0.78 per kilowatt hour.
Gatchalian thus made a stern call on
the ERC to commit to a new timeline on its decision on the transmission rates’
updating in particular – so the consumers could benefit of the warranted
payback in their electric bills.
“It’s disappointing that the
regulator (ERC) who is tasked to protect public interest of the consumers, that
is not happening. In fact, because of their inefficiency we are being charged
with expensive electricity rates,” he stressed.
The lawmaker opined that the
building blocks in the calculation of weighted average cost of capital (WACC)
in the transmission tariffs already changed significantly since the last
regulatory reset in 2015, but the ERC has not gotten headway yet into
fortifying the regulation methodology on the rate-setting of power utilities.
“There’s huge mismatch –
independently we’re looking at the individual building block, there are a lot
which are no longer updated – one example is the T-Bills because that’s part of
the WACC calculation. Supposedly, updating is part of the reason of the
five-year rolling regulation so consumers won’t be overcharged,” the lawmaker
indicated.
His mandate to the ERC then is to
submit a definitive timeframe on when it can bring up to code the regulated
rates of power utilities – and if warranted, order prudently incurred and
justifiable refund to the Filipino consumers.
“The bottom line here is because of
the delays, we are now being charged of additional cost of delay – we
calculated that to be around P0.78 per kWh… we don’t want to use administrative
sanctions as a mode to pressure them (ERC officials), we’re trying to be as
harmonious as possible so we’re giving them a chance to stay true to their
words,” Gatchalian averred.
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