ERC seeks solution to Davao’s high electricity rates

Published December 9, 2022, 10:27 AM

by Myrna M. Velasco

The Energy Regulatory Commission (ERC) is seeking solution to ease the high electricity rates afflicting consumers in various Davao provinces.

This has been the focus of the continuing caravan of the ERC, which is scrutinizing the power supply agreements (PSAs) of the distribution utilities with their power suppliers not just in Davao, but nationwide.

For the Davao region, the power utilities servicing various segments of end-users in Davao domains include Davao Light and Power Company (DLPC) of the Aboitiz group; Davao del Norte Electric Cooperative, Inc. (DANECO); Davao Oriental Electric Cooperative, Inc. (DORECO); and Davao del Sur Electric Cooperative, Inc. (DASURECO).

The ERC conveyed that the distribution utilities “sought government involvement in providing assistance to the ECs (electric cooperatives) explain to their member-consumers that the magnitude of increase is beyond the control of the ECs as generation charge is a pass-through cost.”

According to the regulatory body, the spikes in power rates in the Davao region had been mainly triggered by the swelling prices of coal in the international market.

In a consultative meeting led by ERC Commissioner Marko Romeo L. Fuentes, the Commission noted that they are targeting to “find possible solutions to address the increasing power rates brought about by the spike in the global prices of coal.”

Coal is currently the dominant fuel of power plants supplying electricity to various areas in the Davao region, because that had been the technology solution they embraced when they were suffering from power supply crisis in the past 7-8 years.

For ERC, it emphasized that it will “explore feasible immediate measures to ease the burden of electricity consumers who will have to set aside additional funds to pay for their higher electric bills due to increase in generation charge.”

Generation charge accounts for the biggest cost component being passed on to consumers in their monthly electric bills.

Fuentes stated that “even before the start of the series of PSA caravan, the ERC has already identified a number of issues and the corresponding action plans.”

He added “there already exists a global crisis on the rising prices of oil and coal which caused electricity rates to increase. These problems are the reasons why we are here to find solutions.”

Currently, the band-aid measure pursued by the ERC is the temporary suspension of the feed-in-tariff allowance (FIT-All) charge, which is a separate line item in the electric bills amounting to P0.0364 per kWh.

The FIT-All charge is collected from all consumers; and the revenues accrue to the FIT Fund which is being utilized to compensate the capacities injected by qualified renewable energy (RE) developers.