Power customers get refunds in electric bills this month

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By Mike Baños
July 15, 2019

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Good news in your electricity bills this July.

The Energy Regulatory Commission  (E R C) has ordered twelve private distribution utilities (DUs) to refund “regulatory reset cost” to their customers in their electricity bills this July, 2019, including any remaining amount from the previous regulatory period plus interest.

Per the ERC, the Regulatory Reset Costs are expenses incurred in engaging regulatory experts or consultants when setting and updating the DU’s electricity rates.

Under the Performance-Based Regulation (PBR) methodology, privately-owned DUs are allowed to charge the Regulatory Reset Cost in their revenue requirement.

However, ERC noted that "the 17th Congress appropriated funds for purposes of regulatory reset," leaving the collected Regulatory Reset Cost for the 3rd regulatory period untouched.

"The Commission is of the view that the cost of regulation should be at the expense of the government and should not be a burden to the electricity consumers... [T]he Commission deems it prudent to refund the amounts collected by DUs for this purpose," ERC chair Agnes Devanadera said in a statement last week.

Among those  ordered to refund their customers are the four private DUs in Mindanao: Cagayan Electric Power and Light Co. (CEPALCO); Cotabato Light and Power Co. (CLPC); Davao Light and Power Co. (DLPC); and Iligan Light and Power, Inc. (ILPI).

“This is a one-time refund to be effected in the July 2019 billing,” said Rolando J. Linaac, ILPI Finance Officer. “For ILPI, the amount to be refunded to our customers is P 558,830.00 equivalent to P .0274 per kilowatt hour(/KwH).”

“This represents the unutilized fund for regulatory reset cost in relation to the Performance Based Rate (PBR) Making, which the ERC subsequently resolved shall be borne by the government. The reset cost was part of the rates granted to Private DUs years back, hence, this refund,” he noted.

ILPI President Ralph B. Casiño acknowledged receipt of the ERC order and said ILPI would comply.

“We got our order a few days ago and ILPI will comply,” Casino said. “The cost was tucked into the rates but for some reason, the reset schedule was delayed, thus the refund.”

The ERC ordered eight more DUs in Luzon and the Visayas to refund a total of  P20.8 million to their customers July billings, ranging from P0.0058 to P0.0694./KwH.

These include Cabanatuan Electric Corporation (CELCOR); Clark Electric Distribution Corporation (CEDC); Dagupan Electric Power Corp. (DECORP); La Union Electric Company (LUECO); San Fernando Electric Light & Power Co. (SFELAPCO); Tarlac Electric, Inc. (TEI) in Luzon and the  Bohol Light Company, Inc. (BLCI); and Visayan Electric Company (VECO) in the Visayas.

Among the Mindanao DUs, CEPALCO was mandated to refund the highest amount at P5,098,534 or P0.0556/kWh; followed by Cotabato Light and Power Co. with P949,743 or P0.0694/kWh; Iligan Light and Power Co. — P558,830 or P0.0274/kWh; and Davao Light and Power Co., P262,640 pr P0.0013/kWh

The ERC said the total regulatory reset cost refund to ratepayers was approximately P284,727,996 – including the amount previously ordered refunded to Meralco subscribers.

The ERC reiterated that the DUs must reflect the one-time refund in their customers’ billings for July – and should be specified as a separate item in their electric bills.

 “We enjoin the privately-owned DUs to submit a report to the Commission on their compliance with our refund directive on or before 15 August 2019,” Devanadera said.

The ERC has advised power consumers of private DUs to check their electricity bills next month and find out if the regulatory reset cost refund has been effected, including any relevant interest earned thereon.

The consumer advocacy group Laban Konsyumer Inc. has welcomed the ERC directive.

“Laban Konsyumer Inc. notes that these reduction in electricity rates are good for all types of consumers,” Laban Konsyumer president Victorio Dimagiba said in a statement.

“While in small amounts, the reduction when added up should bring electricity rates lower for all of us,” he added. (with online reports)


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