Power utilities to submit reports on preferred users
The Philippine Star
06/05/2006
The Energy Regulatory Commission (ERC) has ordered the National Power Corp. (Napocor), National Transmission Corp. (TransCo), distribution utilities (DUs) and all regulated entities to submit monthly reports on customers who are enjoying preferential rates.
The new ruling, the ERC said, is pursuant to Republic Act 9136 or Electric Power Industry Reform Act (EPIRA) of 2001 which mandates the commission to protect public interest as it is affected by the rates and services of electric utilities and other providers of electric power.
The commission said this resolution is also pursuant to the Department of Energy Act of 1992 and Sections 19 and 43 of the EPIRA which enables the ERC to have power to determine, fix, prescribe and regulate the rates being charged by all DUs, TransCo and Napocor to their customers.
According to ERC, they have to monitor the granting of preferential rates which may lead to cross-subsidies to the other customers of the said DUs, TransCo and Napocor.
"To protect the interest of the electricity consumers who are not granted preferential rates, the impact of the preferential rates granted by all DUs, TransCo, Napocor and other regulated entities must necessarily be monitored.
Section 74 of the EPIRA mandated the commission to phase out all cross-subsidies within the grid, between grids and/or class of customers.
The ERC said the report should be submitted every 15 day of each month and should include: the list of customers enjoying preferential rates; kilowatthours sold to the said customers; approved preferential rate for each customer; and the level of voltage these customers are connected to.
Last year, the ERC ordered the removal of the cross-subsidies extended by DUs to their customers.
The current inter-class subsidy levels will be removed in two equal steps: 50 percent last November 2005 and the remaining 50 percent in November 2006.
The two-step removal will mitigate the bill impact of the EPIRA-mandated process to the currently subsidized residential sector.
The completion of the intra-grid cross-subsidy removal of TransCo will reduce transmission charges of Meralco residential customers by six centavos per kilowatthour (kWh) and P20.42 per kW for commercial and industrial users.
The net effect of the two subsidy reduction efforts for residential customers will be 15 centavos per kWh.
For an average Meralco residential customer consuming 200 kWh per month, this is an add-on of P1 to his daily electricity bill of around P50.
While EPIRA mandates the removal of inter-grid, intra-grid, and inter-class cross-subsidies over a period of three years, ERC has the power to extend the removal process to consider its adverse effect particularly on the residential end-users.
Lifeline subsidies are, however, exempted from the cross-subsidy phase-out for a period of 10 years unless extended by law.
Despite the gradual removal of cross-subsidies, Meralco residential customers consuming 50 kWh and below per month will continue to enjoy a 50-percent discount on their monthly bill; those consuming 51 to 70 kWh, a 35-percent discount; while those consuming 71 to 100 kWh, a 20-percent discount.
Meralco’s lifeline users numbered more than 1.5 million as end-2005, comprising 38 percent of its residential customers.
06/05/2006
The Energy Regulatory Commission (ERC) has ordered the National Power Corp. (Napocor), National Transmission Corp. (TransCo), distribution utilities (DUs) and all regulated entities to submit monthly reports on customers who are enjoying preferential rates.
The new ruling, the ERC said, is pursuant to Republic Act 9136 or Electric Power Industry Reform Act (EPIRA) of 2001 which mandates the commission to protect public interest as it is affected by the rates and services of electric utilities and other providers of electric power.
The commission said this resolution is also pursuant to the Department of Energy Act of 1992 and Sections 19 and 43 of the EPIRA which enables the ERC to have power to determine, fix, prescribe and regulate the rates being charged by all DUs, TransCo and Napocor to their customers.
According to ERC, they have to monitor the granting of preferential rates which may lead to cross-subsidies to the other customers of the said DUs, TransCo and Napocor.
"To protect the interest of the electricity consumers who are not granted preferential rates, the impact of the preferential rates granted by all DUs, TransCo, Napocor and other regulated entities must necessarily be monitored.
Section 74 of the EPIRA mandated the commission to phase out all cross-subsidies within the grid, between grids and/or class of customers.
The ERC said the report should be submitted every 15 day of each month and should include: the list of customers enjoying preferential rates; kilowatthours sold to the said customers; approved preferential rate for each customer; and the level of voltage these customers are connected to.
Last year, the ERC ordered the removal of the cross-subsidies extended by DUs to their customers.
The current inter-class subsidy levels will be removed in two equal steps: 50 percent last November 2005 and the remaining 50 percent in November 2006.
The two-step removal will mitigate the bill impact of the EPIRA-mandated process to the currently subsidized residential sector.
The completion of the intra-grid cross-subsidy removal of TransCo will reduce transmission charges of Meralco residential customers by six centavos per kilowatthour (kWh) and P20.42 per kW for commercial and industrial users.
The net effect of the two subsidy reduction efforts for residential customers will be 15 centavos per kWh.
For an average Meralco residential customer consuming 200 kWh per month, this is an add-on of P1 to his daily electricity bill of around P50.
While EPIRA mandates the removal of inter-grid, intra-grid, and inter-class cross-subsidies over a period of three years, ERC has the power to extend the removal process to consider its adverse effect particularly on the residential end-users.
Lifeline subsidies are, however, exempted from the cross-subsidy phase-out for a period of 10 years unless extended by law.
Despite the gradual removal of cross-subsidies, Meralco residential customers consuming 50 kWh and below per month will continue to enjoy a 50-percent discount on their monthly bill; those consuming 51 to 70 kWh, a 35-percent discount; while those consuming 71 to 100 kWh, a 20-percent discount.
Meralco’s lifeline users numbered more than 1.5 million as end-2005, comprising 38 percent of its residential customers.
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