20 Luzon power distributors may face penalties

MANILA, Philippines — Twenty power distributors in Luzon may face penalties from the Energy Regulatory Commission (ERC) for failing to file their applications to recover pass-through costs on time.

In a statement yesterday, the ERC said 20 Luzon power distribution utilities (DUs) have yet to submit their applications for automatic cost adjustment and true-up mechanisms even as the deadline lapsed.

These ECs include Abra Electric Cooperative Inc. (ABRECO), Albay Electric Cooperative Inc. (ALECO), First Bay Power Corp. (FBPC), First Laguna Electric Cooperative Inc. (FLECO), Ibaan Electric Corp. (IEC), Ilocos Norte Electric Cooperative Inc. (INEC), Isabela I Electric Cooperative Inc. (ISELCO I), Isabela II Electric Cooperative (ISELCO II), Kalinga-Apayao Electric Cooperative Inc. (KAELCO), Masbate Electric Cooperative Inc. (MASELCO), Nueva Ecija I Electric Cooperative Inc. (NEECO I), Nueva Vizcaya Electric Cooperative Inc. (NUVELCO), Oriental Mindoro Electric Cooperative Inc. (ORMECO), Pangasinan I Electric Cooperative Inc. (PANELCO I), Pampanga II Electric Cooperative Inc. (PELCO II), Quirino Electric Cooperative Inc. (QUIRELCO), San Fernando Electric Light & Power Company Inc. (SFELAPCO), Ticao Island Electric Cooperative Inc. (TISELCO), Zambales I Electric Cooperative Inc. (ZAMECO I), and Zambales II Electric Cooperative Inc. (ZAMECO II).

Last month, the ERC reminded the Luzon DUs that failure to file their complete over and/or under-recovery application, along with the necessary supporting documents until May 30 may result in the imposition of administrative sanctions and penalties in accordance with relevant ERC rules and regulations.

In its warning, the ERC said that the DUs’ failure to fulfill the requirements within the designated period may result in suspension of the DU’s authority to impose pass-through charges to consumers.

This measure ensures accountability and serves as a safeguard against undue burdens on electricity consumers.

Meanwhile, the ERC said 48 Luzon DUs submitted their respective applications for automatic cost adjustment and true-up mechanisms for the period 2020-2022.

The applications will be evaluated by the ERC to validate the recovery of pass-through costs implemented by the DUs and confirm the true-up of other pass-through charges, if any.

The filings were made pursuant to Resolution No. 14, Series of 2022, which revised the rules on pass-through charges to ensure the protection of all electricity consumers and promote transparency and accountability among the DUs starting this year.

Under the revised rules, DUs will have to follow a new uniform reportorial requirement to allow more information to be available and accessible.

Pass-through costs are amounts collected by DUs, which include electric cooperatives and private utilities, for charges other than the distribution charge or the payment for use of the DU facilities.

Other pass-through charges include taxes, feed-in tariff allowance, and universal charge which are all remitted by the DUs to the government.

The principle of pass-through dictates that the DUs shall not gain or lose from these charges.

According to the ERC, the pass-through costs to be collected under the 2022 revised rules cover generation charges or the payment for the supply of electricity, transmission charges or the payment for the use of the high voltage transmission grid, and other subsidies and mandatory payments, such as lifeline and senior citizen subsidies, system loss, and other pass-through costs as may be approved by the commission.