30c Mandated Rate Reduction will still be enjoyed
The Energy Regulatory Commission (ERC) assured that the residential consumers will continue to enjoy the Mandated Rate Reduction (MRR) of thirty centavos per kilowatt-hour (PhP 0.30/kWh) as provided in Section 72 of the Electric Power Industry Reform Act (EPIRA).
The assurance was made by the ERC amidst its resolution in its en banc session on 02 August 2006 that excludes from the MRR scope the power traded by the National Power Corporation (NPC) in the Wholesale Electricity Spot Market (WESM) which are not covered by Transition Supply Contracts (TSCs). This is due to the fact that the prices of electricity at the WESM are not the regulated “NPC rates” referred to in Section 72, as these are set by market forces during the trading and not through rate regulation.
“Imposition of the MRR will distort the price of NPC power traded in the spot market which will affect competition in the market,” ERC Chairman Rodolfo B. Albano, Jr. said.
Be it emphasized, however, that majority of the DUs are under TSCs and a large number of residential consumers will still enjoy the MRR.
“The
ERC vows to explore means to give the consumers the lowest possible price for
electricity without sacrificing the quality, efficiency and viability of the
power providers,” Chairman Albano said.
August 4, 2006