ERC suspends rate adjustment filing of ECs
The Energy Regulatory Commission (ERC) suspended the rate adjustment filings of electric cooperatives (ECs) through its issuance of Resolution No. 7, Series of 2008 entitled: “A Resolution Imposing a Moratorium for the Filing of Rate Adjustment Petitions/Applications by the Electric Cooperatives” dated April 9, 2008. The moratorium on the filing of rate adjustment petitions will enable the ECs to prepare for the impending new rate-setting methodology for ECs that will be implemented starting January 2009.
“The Resolution will give leeway to the ECs for them to be able to prepare for the adoption and implementation of the new regulatory framework and will prevent duplication of efforts for the smooth implementation of the new methodology,” ERC Chairman and CEO Rodolfo B. Albano, Jr. said.
The new rate-setting methodology for ECs developed by the ERC, called Classification and Benchmarking of ECs, aims to: (1) introduce a tariff-setting methodology that is more responsive to the EC’s needs; (2) provide incentives to improve efficiency and have the gains shared to its consumers; and (3) reduce the regulatory burden of sector regulation. The ERC, under Section 43 (f) of the Electric Power Industry Reform Act (EPIRA) and Section 4, Rule 3 of its Implementing Rules and Regulations (IRR) is empowered to establish and enforce, in the public interest, a methodology for setting retail rates for the captive market of a DU. Also, the ERC may adopt alternative forms of internationally-accepted rate-setting methodology as it may deem appropriate.
“The new rate-setting methodology for the ECs will be more responsive to the needs of the ECs under a competitive environment while ensuring that the long-term consumer interests are protected and promoted,” Chairman Albano concluded.
April 21, 2008