ERC order further lowers MORE Power rates

By Francis Allan L. Angelo and Joseph B.A. Marzan

Electricity rates in Iloilo City will go down further after the Energy Regulatory Commission (ERC) ordered the Philippine Electricity Market Corp to stop the collection of congestion charges and other applicable charges.

In a statement, MORE Electric and Power Corp said it will await “ERC’s directive on the refund schedule of the excess generation charge.”

MORE Power said that for the September 2021 billing month, the estimated 3,000 customers who already received their bills on September 20-22 will be recalled and a revised bill will be issued to consumers reflecting the corrected generation charge and with total average rates of:

Residential – P6.38 per kilowatt-hour (instead of P6.45)

Commercial – P6.11/kWh

Power/Industrial – P6.05/kWh

Power rates in Iloilo City, and even in other parts of the region, shot up due to increases in congestion charges by PEMC, the operator of the Wholesale Electricity Spot Market (WESM).

The spike in line rentals and electricity rates was due to the damage caused by the contractor of the Department of Public Works and Highways (DPWH) on one of the lines of the Cebu-Negros Submarine Cable during its conduct of an amphibious dredging in the mouth of Bio-os River, Brgy. Pondol, Amlan, Negros Oriental last June 2021.

The submarine cable is operated by the National Grid Corporation of the Philippines (NGCP).

The damaged line consequently resulted in decreased transfer capacity of the Cebu Negros Submarine Cable, which led to congestion that limits the available supply.

Consequently, costlier diesel plants have been tapped to compensate for the load required, ultimately setting the marginal costs that define the current pricing in Negros and Panay.

High line rental amounts due to congestion also jacked up prices of electricity.

MORE Power raised the issue with ERC, which later found out that it would be unfair for consumers to bear the brunt of the rate hike that was caused by the DPWH contractor.

“The Commission is of the view that the congestion and other charges that are attributable to the damage of the Cebu-Negros Submarine Cable, which was not caused by the consumers, should not be charged to them,” ERC chairperson and CEO Agnes VST Devanadera said in a letter to the PEMC dated Sept 20, 2021.

The ERC also directed PEMC to refund the charges that were already collected from the customers for the billing period of June to August 2021. These charges are the reason why electricity rates of MORE Power and electric cooperatives increased by at least P1 per kilowatt-hour in said months.

The ERC said the refund must be implemented in a period equivalent to the number of months covered by the collections. For illustration, the collection of two months’ congestion and other applicable charges, shall be refunded within a period of no more than two months.

 

WELCOME DEVELOPMENT

Meanwhile, Iloilo City Mayor Jerry Treñas hailed the ERC decision in a Facebook post: “We are very happy that they heard our plea especially during this time of crisis.”

In a message to Daily Guardian, Treñas said he welcomes the decision which was made possible by his appeal to the ERC along with other sectors.

Treñas along with several business organizations and consumer groups supported MORE Power’s complaint with the ERC regarding the high line rentals and congestion charges.

In a letter to the ERC on Sept 9, the mayor said the city enjoyed the lowest rate in the country at P6.45/kilowatt-hour (kWh) for residential customers and even lower for our commercial and industrial rate classes courtesy of MORE Electric and Power Corp.

“We were elated and we realized then that the City was right in supporting MORE Power all along. However, in the billing for August 2021, rates in the City increased by P 1.55/kWh to an average of P7.99/kWh for residential customers. Furthermore, I was informed by MORE Power president, Roel Z. Castro that it will further increase to a rate of around PI0/kWh for the September 2021 billing,” the mayor added.

The Iloilo Business Club also welcomed the decision of the ERC to stop the congestion charges and the order to refund the fees that were already collected.

IBC executive director Lea Lara told Daily Guardian that they also received a copy of the ERC order via email.

“We are happy over this development. This kind of regulatory intervention is what we are hoping when we sent the letter appeal and ERC delivered for the Ilonggo consumers. Looking forward to lower rates in the coming months, at least in the vicinity of the July pricing,” Lara said.