ERC to issue PA for SPEED

The Energy Regulatory Commission (ERC) is set to issue within this week a provisional authority to implement the public and private sector-led Special Program to Enhance Electricity Demand (SPEED).

"The National Power Corp. (Napocor) and the Manila Electric Co. (Meralco) have finished their presentation. The (ERC) commission will deliberate on SPEED application," ERC Acting chairperson Leticia Ibay said over the weekend.

Ibay said the five-man quasi-judicial body of the ERC would be coming out with the decision anytime this week. "They are asking for a provisional authority. We will come up with a decision either Thursday or Friday (this week)," she said.

According to Ibay, the commission will have to ensure that the application of SPEED will be both beneficial for the program’s proponents and the consumers.

"We have to study it carefully. But we will be coming out with our decision as soon as we are assured that the program will be implemented as planned," she said.

In August this year, Napocor and Meralco have launched the said program through the initiative and supervision of the Department of Energy (DOE) and the Department of Trade and Industry (DTI). It will provide a 92-centavo discount to big industrial and commercial users to incremental electricity consumption.

The scope of the SPEED program, which was originally intended for some 656 large industrial and commercial customers in the Meralco franchise area covering Metro Manila and nearby provinces such as Bulacan, Rizal, Cavite and Batangas, was expanded last month.

With the expansion, the pricing incentive program will also cover different distribution utilities and electric cooperatives outside the metropolis.

Electric distribution companies such as the Angeles Electric Corp.; Cabanatuan Electric Corp.; Cagayan Electric Power & Light Co. (CEPALCO); Dagupan Electric Corp.; Iligan Light & Power, Inc.; La Union Electric; Tarlac Electric Inc.; San Fernando Electric Light & Power Co. (SFELAPCO) and Visayan Electric Co. (VECO) have signed a memorandum of agreement (MOA) with Napocor to join the program.

Electric cooperatives led by the Cebu Electric Cooperative, Inc. (CEBECO), which serves large industries in the highly urbanized Cebu City, also signed a MOA with Napocor for the SPEED program.

Based on the plan, the SPEED will be implemented in phases. Phase I will cover industrial and commercial customers with a minimum monthly demand of 1,000 kilowatts (kW). The second phase will be allowed customers with a minimum monthly demand of 500 kW.

The program provides that directly-connected customers with existing power supply contract with Napocor and customers of distribution utilities with existing power supply contract with Napocor may avail of the pricing discount. The price discount will be applied on the customers’ incremental consumption or above its customer base line.

In the Luzon grid, Napocor will give a fixed discount of 80-centavos per kW. In Cebu Negros grid, Napocor will give a fixed discount of 70-centavos per kW. Given that Napocor’s power rate in Mindanao grid is already the lowest among the grids, Napocor will offer a 10-centavo per kWh rate discount.

Based on the MOA, distribution utilities and electric cooperatives are required to pass on wholly the Napocor discount rate to the customers. Power sourced by the utilities from their own independent power producer will not carry any discount rate.

For their part, the distribution utilities and the electric cooperative will implement a program called SPEED-Rider, which is a counterpart measure designed to provide discount on the distribution cost. The rate of discount on the distribution cost, however, will be customized in such a way that it specifically responds to the market realities in their respective areas.

The SPEED will take effect upon the approval of the ERC until the billing month of September 2004 or upon the full implementation of the wholesale electricity spot market (WESM) or until such time when there is still available unutilized generating capacity in a particular grid, whichever comes first.