ERC orders NPC to refund industrial customers

The Energy Regulatory Commission (ERC) ordered the National Power Corporation (NPC) to refund 30 centavos per kilowatt-hour to its qualified industrial customers that availed the Special Program to Enhance Electricity Demand (SPEED).

The Order dated April 2004 was issued after NPC failed to satisfactorily explain to the ERC why it only granted 50 centavos per kilowatt-hour SPEED discount. The Commission mandated a rate mark down of 80 centavos per kilowatt-hour in its Order dated October 11, 2002

“The 30¢ difference must be returned to the concerned industrial electricity users. We have ordered NPC to propose to us a scheme to effect the refund to affected customers,” ERC Chairman Rodolfo B. Albano, Jr. said.

SPEED is a promotional program of the NPC to perk up electricity demand and aid distressed industries. The hike in power demand is expected to generate more productivity and socio-economic benefits for the people. Moreover, the increase in power usage will minimize the unutilized generation capacity of NPC.

The Commission earlier charged NPC for violation of ERC Orders, Rules, and Regulations when it did not grant the correct amount of discount.

NPC issued a Show-Cause Order (SCO) to justify its action. In its reply, the state-run power firm cited in part that there is a need for it to evaluate the Customer’s Baseline Load (CBL) which is a pre-requisite to properly implement SPEED. It also told the Regulator that it was never its intention to violate any order, rule and regulation of the Commission.

“ERC finds the explanation unmeritorious. The argument that there was a need for it to evaluate the CBL as a condition precedent to the proper implementation of the SPEED is unacceptable. NPC should have made such evaluation even before it applied for the approval of the SPEED discounts knowing that it would delay the implementation of said discounts once it is approved by the Commission,” the Chief Regulator stressed.

The Commission also emphasized that good faith is not a valid defense in cases of violations of its lawful Orders validly issued in the performance of its mandate in answer to NPC’s statement that it never intended to violate any of its Orders.

“ERC is a fair and just regulatory body. It always stands in the middle, balancing the interests of consumers and the power providers,” Chairman Albano remarked.

May 07, 2004