Republic of the Philippines


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ERC PSA Caravan Reaches Region VI

22 November 2022 /ERC-Planning and Public Information Service

The Energy Regulatory Commission (ERC) with the Department of Energy (DOE) and the Distribution Utilities in Region VI engaged in a productive discussion during the Power Supply Agreement (PSA) Caravan.

ILOILO CITY - The Energy Regulatory Commission (ERC) successfully gathered all eleven (11) Distribution Utilities (DUs) in Region VI for the conduct of its Power Supply Agreement (PSA) Caravan on 22 November 2022.   The ERC has taken an extra mile in partnership with the Department of Energy (DOE) in a bid to immediately respond in finding possible solutions to address the increasing power rates brought about mainly by the spike in the global prices of coal.
The PSA Caravan is a collaborative initiative to engage the stakeholders consisting of ERC, DOE and DUs (both private utility and electric cooperatives) to find possible solutions to mitigate price shock in electricity prices. DUs in the said region sourcing power from their independent power producers (IPPs) using coal as fuel for their generation plants are affected by the rise in coal prices. It was learned from the DUs themselves that they have already instituted a number of measures such as purchasing portion of their power supply from the Wholesale Electricity Spot Market (WESM) during periods when spot prices are low in order to cushion the effect of increased fuel prices. This move temporarily shielded the consumers from the detrimental effects of high electric bills. Also, majority of the DUs in the region have existing contracts with generation companies (gencos) using renewable energy and providing fixed contract prices. These initiatives benefited the consumers during periods when fuel prices are alarmingly high.  

There were common concerns from the stakeholders in Iloilo which were also identified in the series of caravans conducted in the cities of Laoag and Cagayan de Oro. Issues relative to their PSAs include among others, provision relative to fuel cost formula, long term locked-in period, line rental charges, carved out provision for portion of the contracted capacity affected by the consumers opting to be part of the contestable market, deferred payment scheme and increase in Prompt Payment Discount (PPD).  The ERC’s existing Resolution directed the DUs to pass on fifty (50%) of its PPD to its consumers through reduction in Generation Charge.

ERC Commissioner Alexis M. Lumbatan acknowledged and thanked the representatives from the DUs consisting of Iloilo I Electric Cooperative, Inc., (ILECO I), Iloilo II Electric Cooperative, Inc. (ILECO II), Iloilo III Electric Cooperative, Inc. (ILECO III), Guimaras Electric Cooperative, Inc. (GUIMELCO), Capiz Electric Cooperative, Inc.  (CAPELCO), Antique Electric Cooperative, Inc. (ANTECO), Aklan Electric Cooperative, Inc. (AKELCO), Negros Occidental Electric Cooperative, Inc. (NOCECO), Northern Negros Electric Cooperative, Inc.  (NONECO) and Central Negros Electric Cooperative, Inc. (CENECO) and MORE Electric and Power Corporation (MORE Power), the lone private utility, for actively participating in the discussions by sharing their experiences and suggested solutions for the ERC to improve its regulatory framework.

Commissioner Lumbatan also thanked ERC Chairperson Monalisa C. Dimalanta for spearheading the activity which brought the ERC to the grounds in finding doable solutions that will ultimately benefit the electricity consumers.

On her part, Chairperson Monalisa C. Dimalanta also encouraged the DUs to already proactively prepare for the coming summer months by promoting programs to manage their demand and avoid power shortages.

The event was also highlighted with the awarding of Qualified End-User Certificate of Compliance to consumers of Barangay Hall Ayubo headed by Barangay Captain Magno Capindo in recognition of their own initiatives of installing their own net metering facilities. Chairperson Dimalanta said “This is a type of program that not only empowers consumers but also inspires others through greater access to electricity. This is the real meaning of people empowerment, this is what we call energy democracy.

Addressing the stakeholders, Chairperson Dimalanta said in conclusion, “Every time we [ERC] do the caravan, I feel strengthened by your passion in filling up our minds with possible solutions to face these challenges. We are blessed by your participation and contributions in collaborating with ERC towards improving its regulatory framework. While we recognize the sanctity of your existing PSAs, we are hopeful that this engagement will produce win-win solutions for the DUs and gencos with the common goal of performing our mandates to deliver services to our consumers in a least cost manner.

Before the year ends, the ERC will be in full swing to cover the provinces of Isabela, Davao, Butuan, and Cebu.


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