Via its continuing caravan, the Energy Regulatory Commission (ERC) has already started scrutiny of the power supply agreements (PSAs) underwritten by servicing power utilities in the off-grid domains or those that are not physically connected to the main grid.

The examination of the power supply deals is one measure that the regulatory body has been instituting so it can find a way how to bring down the overall electricity rates that consumers will have to pay for in their monthly electric bills.

The costs of power supply contracts are reflected in the generation charge as a separate line item being passed on to consumers; and that accounts for the biggest component in the rates being passed on – with a share of roughly 55 to 60% out of the total billed charges.

It has been the ERC’s belief that if power utilities or electric cooperatives could be disciplined or made prudent on their power supply sourcing– like there are no over-contracting being done and PSAs are of ‘least cost’ parameters - then there would be leeway to trim power rates in the country.

The off-grid areas covered by the ERC’s caravan include those of the Marinduque Electric Cooperative, Inc. (MARELCO), Masbate Electric Cooperative, Inc. (MASELCO), Romblon Electric Cooperative, Inc. (ROMELCO), Ticao Island Electric Cooperative, Inc. (TISELCO), and Tablas Island Electric Cooperative, Inc. (TIELCO).

The Commission indicated that its consultation processes with the off-grid ECs have been intended “to learn first-hand the various challenges being faced by electric cooperatives and consumers in the small islands of the country.”

It is worth noting that many of the off-grid areas still suffer from protracted blackouts or service interruptions – not just because of the financial plight of the electric cooperatives (ECs) servicing them, but also on their sourcing of power supply.

Regrettably, they also depend largely on electricity generated from oil-based power plants, hence, the recurrent spikes in fuel prices in the world market had subsequently deepened their dilemma of high electricity rates.

The inability of power suppliers, primarily state-owned National Power Corporation (NPC), to timely recover cost adjustments on fuel purchases due to regulatory lag also resulted in a budget shortfall, that in the process, had worsened blackout predicaments in off-grid areas.

Beyond assessment of the PSAs, the ERC similarly discussed other prospective measures that the off-grid utilities can tap into so they can ease the predicaments of their customers from the double whammy of brownouts and incessant high electric bills.

Among the solutions and measures dangled by the ERC had been the “ANTI BILL SHOCK Program’ of the Land Bank of the Philippines which provides credit facility to the DUs (distribution utilities) so they can avoid power rate surges.

And for consumer-complaints, the regulatory agency also apprised the ECs on recent rollout of the ERC LINKod, which is its digital toolbox in reaching out to consumers and other relevant stakeholders, primarily on their concerns relating to electricity bills and even supply disruptions; as well as choices relating to retail competition and project permitting channeled through the energy virtual one stop system or EVOSS.

“The ERC intends to cover all off-grid areas in its caravan. The next ERC caravan is scheduled to be held in Cebu before the end of October,” the Commission conveyed.