Republic of the Philippines

ENERGY REGULATORY COMMISSION

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ERC Collaborates with Davao DUs in Addressing High Electricity Rates

29 November 2022 /ERC-Planning and Public Information Service
The synergy of the Energy Regulatory Commission (ERC) with the Department of Energy (DOE) and the Distribution Utilities during the Power Supply Agreement (PSA) Caravan held in Tagum City, Davao del Norte on 29 November 2022 in finding doable measures to address the increasing power rates in the region.

Tagum, Davao del Norte – All hands on deck for the Energy Regulatory Commission (ERC), Department of Energy (DOE) and the four (4) Distribution Utilities (DUs) in Davao region as they joined forces in finding possible solutions to address the increasing power rates brought about mainly by the spike in the global prices of coal.

ERC Commissioner Marko Romeo L. Fuentes led the consultative meeting in exploring feasible immediate measures to ease the burden of electricity consumers who will have to set aside additional funds to pay for their higher electric bills due to increase in Generation Charge.

Even before the start of the series of PSA caravan, the ERC has already identified a number of issues and the corresponding action plans.  In fact, the ERC just recently issued a Resolution suspending the collection of the Feed-in Tariff Allowance (FIT-All).” Commissioner Fuentes said.

The ERC’s suspension of FIT-All collection spares the consumers from paying PhP0.0364 per kWh for the next three (3) billing months starting December 2022 until February 2023.  This is one of the immediate reliefs ERC presented with the DUs during the PSA Caravan.
Representatives from Davao del Norte Electric Cooperative, Inc. (DANECO), Davao Oriental Electric Cooperative, Inc. (DORECO), Davao del Sur Electric Cooperative, Inc. (DASURECO), and Davao Light and Power Company (DLPC) engaged in productive discussion in exchanging their respective strategies in helping mitigate the impact of increased in fuel prices on the electricity rates.

DLPC shared that they consider buying power from the cheapest source. The electric cooperatives (ECs) sought government involvement in providing assistance to the ECs explain to their member-consumers that the magnitude of increase is beyond the control of the ECs as generation charge is a pass-through cost. DORECO shared that when the electric cooperative (EC) entered into contract with an Independent Power Producer (IPP) with a diesel generating plant, the cost of fuel was not that high as it is now. The said EC manifested reliance on ERC’s extensive and prudent review of the formula for fuel pass-through in the Power Supply Agreements (PSAs). DANECO on its part, appealed for intervention on the schedule of Preventive Maintenance Schedule (PMS) of the generating plants. This impacts on the ability of the DUs to source cheap replacement power. This was duly noted by the DOE representatives.  Lastly, DASURECO expressed its appreciation on the government’s efforts, through the ERC and DOE, for coming up with this kind of platform where the industry stakeholders work together to achieve a common goal and that is consumer protection.

There already exists a global crisis on the rising prices of oil and coal which caused electricity rates to increase. These problems are the reasons why we are here to find solutions.  No one knows everything, but if we work together, we can survive this extraordinary period.”  Commissioner Fuentes shared with the Davao DUs in attendance.

Before the year ends, the ERC is hopeful to cover Caraga and Bicol regions.  It is optimistic that by first quarter of 2023, ERC has already completed its PSA Caravan so that it can already come up with holistic feasible solutions to address the rising cost of electricity in the country.

 


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