ERC starts process to unbundle power rates

The Energy Regulatory Commission (ERC) has directed all electric distribution utilities and cooperatives to submit a new unbundled rate petition, an ERC ranking official said over the weekend.

ERC commissioner Oliver Butalid said the submission of new application for unbundled rate is consistent with the provision of RA 9136 otherwise known as the Electric Power Industry Reform Act (EIRA).

Butalid said Section 36 of the law provides that the distribution utilities and electric cooperatives will have to conform with a uniform filing requirement.

Specifically, this particular provision states that "within six months from the effectivity of this Act (June 26), each distribution utility shall file its revised rates for the approval by the ERC. The distribution wheeling charge shall be unbundled from the retail rate and the rates shall reflect the respective costs of providing each service."

The ERC, official said, will start issuing the uniform application form to these power utilities on Oct. 15.

"This particular application form is for rate unbundling," Butalid said, noting that there at present about 144 electric cooperatives and public utility firms operating in the country today.

He said under the law, the distribution utilities and electric cooperatives will have until Dec. 26 of this year to submit their application to the ERC.

In turn, the ERC will have at least six months from Dec. 26 to evaluate and subject to public hearing the unbundled rate petition filed by the distribution companies and electric cooperatives.

"The days between Dec. 26 to June next year would be very hectic for us since we have to hear all the 144 applications in just six months," he said.

Butalid said they are not certain whether the power distribution utilities and electric cooperatives would submit a "revenue-neutral" application. "They normally have different mechanism and accounting procedures, we don’t know if they would pass application based on revenue-neutral basis," he explained.