ERC defends time-of-use electricity billing mechanism

The Energy Regulatory Commission (ERC) has assured that the time-of-use (TOU) electricity billing mechanism is beneficial to all consumers. 

ERC chairman Rodolfo B. Albano issued statement to enlighten electricity consumers on the use of TOU amid complaints the new scheme will jack up electric bills.

The TOU, Albano said, was designed to approximate the true cost of producing electricity at different times of the day.   

The ERC chief said it takes into consideration the fact that as demand increases, the cost of generation increases.  Power plants with the least cost are being dispatched first but as demand increases during the day, plants with higher costs are dispatched, resulting in increased rates.   

"Under the TOU scheme, electricity is most expensive to produce and its rates are highest during peak hours. The consumers, however, have the flexibility to shift and use greater amount of electricity during the hours when the cost of power is at its lowest thus, proactively manage their loads," Albano said. 

Albano said if consumers are able to shift from peak to off-peak, the peak demand of distribution utilities (DUs) will be reduced. 

Hence, he said the implementation of the TOU rates will promote efficient utilization of cheaper generating capacities, avoid operation of expensive oil-based plants and delay the need to construct additional generating facilities.  

"In the long-run, the use of the TOU billing design will result in reduced operating cost for generating companies that will redound to lower electricity rates for end-consumers," he said.

An ERC decision which included the implementation of the TOU was approved last April 13 and posted in the ERC website on April 22.