ERC speeds up issuance of PAs to power distribution utilities

The Energy Regulatory Commission (ERC) is accelerating the issuance of provisional authorities (PAs) to power distribution utilities seeking approval of revised lifeline rate structures prior to cushion the impact of the expanded value added tax (EVAT) on their customers which takes effect in July.

"Time is of the essence. We need to act on the petitions. The problem is we have not yet received any application from utilities. Once the commission gets hold of their applications, we will issue at the soonest time possible a provisional authority," said ERC chief Rodolfo Albano.

To speed up the process, the ERC will undertake extensive consultations with utilities, especially electric cooperatives. There are 119 electric cooperatives with 25 individual private investors.

The power distributors were directed last week by the Department of Energy (DOE) to file their necessary petitions with the ERC recommending the level of consumption to be qualified for the lifeline rate that will be applied to marginalized end-users.

The anticipated increase in power rates resulting from the imposition of EVAT on electricity and petroleum sales and services, along with the anticipated further increases in world oil prices has prompted government agencies such as the DOE to create measures to mitigate the negative effects of these developments.

The DOE met recently with power distribution utilities and it was agreed that current lifeline end-users should still enjoy the full benefits of the subsidies under the levels of consumption approved by the ERC before the amendment of the VAT.

The DOE proposed that the exemptions from the EVAT should extend to households consuming up to 200 kilowatt-hours (kWh) per month.

Under the Electric Power Industry Reform Act of 2001, lifeline consumers or those consuming zero to 100 kwh per month are enjoying discounts of up to 50 percent.

"We want those consuming up to 200 kWh per month be exempted from VAT. We also proposed that those consuming below 100 kWh should continue to enjoy the discounts," said Energy Undersecretary Melinda Ocampo.