ERC readies report on Visayan Electric’s alleged high power rates

By Angelica Y. Yang

THE technical staff of the Energy Regulatory Commission (ERC) is set to complete by February its evaluation on whether the biggest power provider in the Visayas had charged “high electricity rates” in the area as alleged by a business group, an official of the agency said on Tuesday.

Floresinda G. Baldo-Digal, ERC commissioner-in-charge, said the regulator’s technical team is evaluating the letter sent by Visayan Electric Co., Inc. to explain its side.

“The explanation is currently under evaluation by our technical staff, they are targeting to present their recommendation to the Commission by next month,” Ms. Digal told BusinessWorld in a text message.

On Monday, Visayan Electric said it had responded to the ERC’s letter, but declined to disclose details of its explanation.

“Visayan Electric has already submitted its explanation to the ERC and we are waiting for ERC’s evaluation,” the company told BusinessWorld in an e-mailed response.

“We assure our customers that Visayan Electric is transparent in its dealings and processes and that the electric utility is committed to providing reasonably priced power in its franchise area,” it added.

On Jan, 4, the ERC directed Visayan Electric, the country’s second largest power utility, to explain why it bought power from Cebu Private Power Corp. at an average of P35.3852 per kilowatt-hour (kWh) for the January-October period.

The power generation rate hit as high as P1,470.90/kWh for September last year, it added.

In contrast, the utility’s average generation rate for Green Core Geothermal, Inc. was at P4.8922/kWh for the 10-month period, while those for Cebu Energy Development Corp. and Therma Visayas, Inc. were at P5.6821/kWh and P5.5584/kWh, respectively, the ERC said.

The regulator also said that at the Wholesale Electricity Spot Market, the average generation rate during the period was at P2.5946/kWh.

The ERC’s letter, a copy of which was obtained by BusinessWorld, directed Visayan Electric to explain the power firm’s generation charges during the subject billing period in relation to the least-cost principle called for under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

The law mandates distribution utilities to supply power at the “least cost to its captive market, subject to the collection of retail rate.”

The ERC’s letter was addressed to Raul C. Lucero, president and chief operating officer of Visayan Electric.

It was prompted by a letter from the Central Visayas Regional Development Council, which endorsed to the ERC a letter from the Cebu Chamber of Commerce and Industry regarding the high electricity rates charged by Visayan Electric and alleged violation of Section 45 of EPIRA.

Earlier, Senator Sherwin T. Gatchalian said a refund should be in order if Visayan Electric’s alleged violations are proven.

“If it will be proven that [Visayan Electric’s] collection is not justifiable, they should return the excess to the consumers. It’s the mandate of the ERC to protect the interest of the public,” he said in a press release last week.

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