Philreca supports ERC’s probe on overpriced generation rates

MANILA, Philippines — The association of electric cooperatives (ECs) supports the initiative of the Energy Regulatory Commission (ERC) to conduct a nationwide investigation on all private utilities and ECs and their power suppliers with regard to overpriced generation rates.

The Philippine Rural Electric Cooperatives Association Inc. (Philreca) said such undertaking has long been pushed by its member ECs.

Philreca said several ECs have tried to talk to generation companies and insisted on renegotiation of their rates amid the power hikes.

“Despite being collectors or collecting agents only of the payments due to generation companies, the transmission system operator, and even the taxes due to the government, many consumers and stakeholders would think that the ECs are the ones who benefit (or worse, the culprit) whenever there are increases in electricity rates,” it said.

Philreca said the increases   are brought about by hikes in charges in the other component of the electricity bills, mainly the generation charge and the resulting increase in government taxes.

According to Philreca, the EPIRA Law allows generation companies to pass these costs to the consumers.

The charges are passed through using the fuel cost adjustment mechanism that is embedded in the power supply agreement of the generation company and the DU.

“The organization is not trying to blame anyone or any sector on what is happening. We want to be clear that we are making these clarifications so that we would know how to address the problem. Likewise, we just want to avoid barking up the wrong tree,” Philreca said.

“Furthermore, we would like to reiterate that electric cooperatives, being collectors of other charges had no control on the imposition of other fees. The only fees that the ECs have control of — the distribution, supply, and metering or DSM charges – remained unchanged, did not change since the last 10 years – it did not change and we never intended for it to increase,” it said.

Prompted by the recent rise in electricity rates and the numerous complaints from consumers, the ERC has started a probe on whether the generation rates passed on by distribution utilities to consumers all over the country are accurate and reasonable.

The nationwide investigation will cover all private utilities and ECs in the country and their respective power suppliers under their power supply agreements.

“We support ERC on the conduct of a nationwide investigation on all distribution utilities to include the electric cooperatives and all power suppliers,” Philreca said.

“We hope that through this investigation, we will be able to identify any concerns that need to be addressed and the necessary stakeholder or agencies to be given accountability and responsibility to propose and accomplish a solution,” it said.