ERC orders electric coops to refund PPA over recoveries

The Energy Regulatory Commission (ERC) approved in its January 4, 2005 regular meeting the refund for over recoveries on Purchased Power Adjustment (PPA) made by four electric cooperatives from their respective customers. ERC carefully examined the sample bills submitted by the ECs and computed the PPA charges that the said coops must collect and compared it with the actual amounts they collected.

The Misamis Occidental I Electric Cooperative, Inc. (MOELCI) will be directed to refund its over recovery of PPA charges amounting to P12,764,427.00 or P0.0748/kWh from February 1996 to February 2004. The Misamis Oriental II Electric Cooperative, Inc. (MORESCO II) will also refund its patrons for the excess PPA charges of P18,705,032.00 or at P0.0543/kWh it collected from February 1996 to May 2004. Pampanga Rural Electric Cooperative, Inc. (PRESCO) and the Ticao Island Electric Cooperative, Inc (TISELCO), will, likewise, effect a refund at P0.1822/kWh to their customers for over recovery of P18,147,601.00 (February 1996 to June 2004) and at P0.3117/kWh for P2,076,372.00 over recovery from January 1999 to August 2003, respectively.

ERC Chairman Rodolfo B. Albano, Jr said, “it is the duty of the Commission to verify the expenses incurred on power costs and the actual collection for the said expenses to determine any over or under recovery. This ensures that the charges to the customers are only true and correct.”

“We, however, stand to be a fair and just regulator protecting the interests of both the electricity providers and that of the consumers,” the chief regulator emphasized.

PPA reflects the adjustment charges of the National Power Corporation (NPC) and independent power producers (IPPs) on power costs. Consequently, it also includes charges for system loss, actual company used power or 1% of total kWh purchased/generated, which ever is lower, and the 2% franchise tax, accordingly.

The adoption of the PPA, which is an automatic cost recovery mechanism, was pursuant to the provisions of Republic Act No. 7832 prior to the effectivity of the unbundled rates. With the unbundling of electricity rates as required under Section 36 of the Electric Power Industry Reform Act (EPIRA), this cost component is no longer a separate component in the electricity bill as it is reflected in the billings appropriately.

January 6, 2005