BAGUIO CITY – Power rates being charged by rural electric cooperatives and private distribution utilities to their consumers are expected to increase by P0.0239 per kilowatt-hour following the decision of the Energy Regulatory Commission (ERC) to approve the petition of the National Power Corporation (NPC) to recover its shortfall from the universal charge missionary electrification (UC-ME) subsidy for 2012.
In its decision dated August 4, 2022, the ERC directed the Power Sector Assets and Liabilities Management corporation (PSALM) to disburse to NPC the approved UC-ME recovery pursuant with the approved true up adjustment mechanism.
Further, PSALM was also directed by the ERC to monitor and report the progress in collection and disbursement of the true up and basic UC-ME in order to distinguish the cash flow of each of the approved UC-ME rate.
The ERC ordered all distribution utilities and the National Grid Corporation of the Philippines (NGCP) to collect from the consumers the U
C-ME true up rate of P0.0239/kwh on top of the existing UC-ME basic rate of P0.1561/kwh for a period of 12 months or until such time that the full amount of P2,606,208,364.83 shall have been collected whichever comes earlier.
Moreover, the distribution utilities and NGCP were also ordered to remit the same to the PSALM on or before the 15th day of the succeeding month.
Earlier, the NPC petitioned the ERC to approve its proposed recovery from the UC-ME charge of the alleged shortfall in the missionary electrification subsidy of 2012 and the corresponding adjustment of the universal charge for the UC-ME with the prayer for the issuance of a provisional authority for the aid purpose.
Power distribution utilities and rural electric cooperatives disclosed that with the latest ERC decision, their respective power rates will surely increase in the coming months as the increase in the UC-ME and other increases in the prevailing pass through and pass on charges will surely be reflected in the power bills of the consumers.
For the past several months, the increase in the power rates being charged to consumers have been caused by the increase in the generation and transmission charges aside from the slight adjustments in the systems loss charge among other charges in the unbundled power rates.
Under the pertinent provisions of Republic Act (RA) 9136 or the Electric Power Industry Reform Act (EPIRA), power rates of distribution utilities and electric cooperatives should be unbundled to reflect the true cost of power.
Based on the law, the rates are composed of pass through charges which is beyond the control of the distribution utilities such as the generation, transmission, universal charges among others and pass on charges which could be under the control of the distribution utilities like the distribution, supply and metering charges.
At the early part of this year, the generation charge had been greatly affected by the skyrocketing prices of coal in the world market as the same is the main component fueling the operation of coal-fired power plants in the country.