ERC calls for comments on its draft Distribution Wheeling Rates Guidelines
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The
Energy Regulatory Commission (ERC) conducted its first public
consultation on August 31, 2004 to pave the way for the
finalization of the Distribution Wheeling Rates Guidelines
(DWRG). The DWRG is an alternative to the Return on Rate
Base (RORB) rate-setting methodology currently in use.
Privately owned distribution utilities attended the consultation
presided by Commissioner Oliver B. Butalid. The Commission
acknowledged the insights and comments of the four power
distributors namely: Cagayan Electric Power and Light Co.,
Inc. (CEPALCO), Manila Electric Company (MERALCO), Dagupan
Electric Corp. (DECORP) and Iligan Light and Power Company,
Inc. Other attendees include the representatives from Davao
Light and Power Co. (DLPC) and San Fernando Electric Light
and Power Co., Inc. (SFELAPCO).
“RORB has been around for more than eighty (80) years. The Philippine electric power industry needs to adopt a new methodology that will suit the changing needs of the times in order to realize the reforms envisioned by the Electric Power Industry Reform Act (EPIRA),” ERC Chairman Rodolfo B. Albano, Jr. stressed in his welcome remarks during the opening of the first public consultation.
The issues discussed during the first public consultation will be available at the ERC website (http://www.erc.gov.ph). Commissioner Butalid is optimistic that the second and final round of consultations scheduled on October 19, 2004 will have more participants. The parties concerned have until October 6, 2004 to submit their written comments. ERC is targeting to decide on the final guidelines on October 29, 2004.
ERC initiated the formulation of a new rate-setting methodology in pursuit of an internationally accepted rate-setting scheme that will create an environment favorable both for consumers and distribution utilities. It will promote efficiency and regulatory stability and eventually lead to lower costs. The DWRG will set the manner and criteria in determining the maximum distribution wheeling rates that may be charged by the DUs in providing distribution services to its customers.
September 3, 2004