ERC drafts new scheme to gauge efficiency of electric cooperatives

MANILA, Philippines - The Energy Regulatory Commission (ERC) is drafting a new scheme to gauge the efficiency of electric cooperatives (ECs).

The ERC is currently conducting public consultations with industry stakeholders for the so-called methodology for efficiency benchmarking of ECs.

For stakeholders in the Visayas and Mindanao areas, the consultation will be held in Cebu City on Feb. 18, while for Luzon-based stakeholders, the public hearing will be held on Feb. 20.

The ERC said feedback from stakeholders through these public consultations would enable the agency to come up with a new and effective methodology in setting the retail rates of the ECs for their respective captive markets.

The new rate-setting methodology for ECs aims to introduce a tariff-setting scheme that is more responsive to the ECs’ needs.

Through the new price gauging scheme, the ERC also aims to provide incentives to improve efficiency and have the gains shared to consumers.

The commission likewise expects to reduce the regulatory burden of sector regulation through this new rate setting method.

Regulatory compliance officers (RCOs) of ECs are mandated by the ERC to attend the expository hearings in compliance of the Mandatory Regulatory Education Program (MREP). 

The MREP was instituted by the ERC to assist utilities through their RCOs to gain adequate knowledge and understanding of the ERC’s rules, regulations, resolutions and guidelines towards compliance to the law and related issuances.

The ERC said under the Electric Power Industry Reform Act (EPIRA), the power sector watchdog must establish and enforce a methodology for setting distribution wheeling rates and retail rates for the captive market of a distribution utility.

The commission, the EPIRA said, should also take into account all relevant considerations, including the efficiency or inefficiency of the regulated entities.

“The ERC must always find ways to improve the viability and cost-efficiency of ECs so that the long-term interests of electricity consumers are promoted and protected,” ERC chairperson Zenaida G. Cruz-Ducut said.