ERC approves power rates going up by 6.5 centavos per kWh nationwide beginning June

by Lenie LecturaMay 23, 2016

from Business Mirror

The Energy Regulatory Commission (ERC) released on Monday an order approving the ancillary services procurement agreement (ASPA) between the National Grid Corp. of the Philippines (NGCP) and the National Power Corp. (NPC), which would result in the collection of a 6.5 centavos-per-kilowatt-hour (kWh) hike in transmission charge from all power consumers starting June.

“The Commission approves the recovery of the differential charge for the ancillary service provided by the NPC to the NGCP representing March 26, 2008, to October 25, 2009 billing period. “The [NGCP] should bill a uniform rate of P31.38/kW month as ancillary service differential for the Luzon, the Visayas and Mindanao grids until such time that the full amount shall have been collected, which would have an estimated rate impact of 6.5 centavos per kWh to end-users,” the ERC said in its 15-page order dated March 15, but was only promulgated last May 20.

The impending rate hike, which will be reflected in the transmission component of an electric bill, was a result of a petition filed by the Power Sector Assets and Liability Management Corp. (PSALM), which took over the disposal of NPC-owned power assets, to recover P6.9 billion, including taxes, in differential ancillary service charges from NGCP.

However, the ERC approved an amount of P5,286,853,359.62. Of which, P1,510,682,053.65 would be collected in Luzon; P1,924,686,069.35 in the Visayas and P1,851,485,236.62 in Mindanao.

At the same time, the recovery period within which the NGCP should impose the AS differential charge to its customers is six months for the Luzon grid, 36 months for the Visayas and Mindanao grids.

“This scheme is designed to mitigate the rate impact of the AS differential to applicant’s NGCP’s customers. Further, a uniform rate for all grids must be implemented in recovering the AS differential amount. The said uniform rate to be charged by NGCP is P31.38 per kW per month, with an estimated rate impact of 6.5 centavos per kWh to end users,” the ERC said.

Once NGCP receives the order, the grid operator would have to bill the distribution utilities (DUs) nationwide, including, Manila Electric Co. (Meralco).

Then, the rate impact will be reflected after one month in the bills of end-users.

The impact will mainly be felt as part of the transmission charge.ERC Spokesman Floresinda Digal said that the rate hike would be reflected in the June electricity bills of consumers.

When sought to comment on how this new rate adjustment will affect the 5.8 million customers of Meralco, Lawrence Fernandez, head for utility economics, said “that would be equivalent to around P13 in the bill each month.”

Further, he said, “if the collection will be spread over six months, then the total amount to be collected would be P78 for a typical household consuming 200 kWh,” Fernandez said in an earlier interview.