News

ERC Consults Public on DWRG Regulatory Reset Issues Paper

The Energy Regulatory Commission (ERC) conducts a series of public consultations on the Regulatory Reset Issues Paper which it has published on September 30, 2005 in accordance with the Distribution Wheeling Rates Guidelines (DWRG), a Performance-Based Regulation (PBR) promulgated by the ERC as an alternative form of Rate-Setting Methodology under the Electric Power Industry Reform Act.

The Issues Paper aims to define the parameters and guide the Regulated Entities in filing their application and submitting the requirements to determine the new Price Cap for the Regulatory Period starting July 1, 2007.

“The ERC urges all stakeholders to take an active part in the series of public consultations for ERC’s careful consideration in determining fair and reasonable Maximum Annual Price Caps for private distribution utilities which have initially signed up to adopt the PBR”, ERC Chairman Rodolfo B. Albano, Jr. appealed.

Such Issues Paper was scheduled for expository public consultation on the following dates and venues:

October 10, 2005 - Cagayan de Oro City
October 13, 2005 - Dagupan City
October 14, 2005 – Main Office

Another set of public consultation will be held for purposes of discussing the inputs of the stakeholders on the said Issues Paper as follows:

November 14, 2005 (10:00 A.M. – 12:00 P.M. and 1:00 P.M. – 5:00 P.M.), Ching and Chiu Function Rooms, Dynasty Hotel, Tiano-Hayes St., Cagayan de Oro City

November 16, 2005 (9:00 A.M. – 12:00 P.M. and 1:00 P.M. – 4:00 P.M.), DECORP Main Office, Dagupan City

November 18, 2005 (9:00 A.M. – 12:00 P.M. and 1:00 P.M. – 4:00 P.M.), ERC Hearing Room, 15th Floor. Pacific Center Bldg., San Miguel Ave., Pasig City.

The said Issues Paper maybe photo-copied, at cost, during regular office hours at the ERC Ortigas Office or maybe downloaded from the ERC website at www.erc.gov.ph or from CEPALCO, DECORP, and Meralco at their respective main offices. All interested parties who have submitted their written comments on the said issues paper on or before October 28, 2005 are given priority to participate in the said proceedings.

The Issues Paper marks the start of the Regulator Reset Process shall determine the Maximum Average Price Cap for the Regulatory Entities for the 2nd Regulatory Period from July 1, 2007 to June June 30, 2011. The process that will be followed is as follows:

An Issues Paper will be published by the ERC, followed by public presentation of the Issue paper in the three centers where Regulated Entities are situated.
After the close of submissions on the Issues Paper, public consultation will occur in the three centers where Regulated Entities are situated.
The ERC will publish its preliminary approach to the price determination, after taking into account the outcome of the consultations.
Regulated Entities will collect historical network and service performance data and submit this to the ERC.
The ERC will revalue the Regulatory Asset Base for each Regulated Distribution System; finalize the performance incentive scheme, determine the Regulatory WACC and carry out all of its other obligations in terms of the DWRG, with the help of a Regulatory Reset Expert(s) as appropriate. This information will be provided to the Regulated Entities to allow them to file their rate applications.
Regulated Entities will collect the necessary expenditure data, prepare their expenditure forecasts, and submit a rate application to the ERC.
Each Regulated Entity will make a public presentation explaining their rate applications.
Public consultation will occur on the rate applications, allowing for questions to the Regulated Utilities.
The ERC will review the rate applications submitted by the Regulated Entities and based on this review and the outcome of the public consultation, publish a draft price determination, indicating the maximum price caps that will apply to each Regulated Distribution System for the Regulatory Period.
Public consultation will occur on the draft determination, in each of the three centers where the Regulated Utilities are situated.
A final determination will be made of the price-cap for each Regulated Distribution System, which will be published and implemented.

October 25, 2005

BACK TO NEWS ARCHIVE