ERC mulls revisions in lifeline rate

MANILA, Philippines - The Energy Regulatory Commission (ERC), the country’s power sector regulator, will look into the possibility of revising some provisions in the lifeline rate that would make it “more targeted”.

This move came after Congress ratified for President Aquino’s approval the 10-year extension of the lifeline rate being given to marginalized electricity consumers under the Electric Power Industry Reform Act (EPIRA) or Republic Act 9136.

ERC executive director Francis Saturnino Juan said they are just waiting for the signed copy from Malacañang so they can order the implementation of the extended lifeline rate.

He said they have not seen the bill passed by Congress or the final copy from President Aquino.

“We’re just waiting for the law to be, or the bill signed into law,” he said.

The ERC official said they would need to see the final version of the law before they could determine if they would need to adopt new rules or carry out some changes in the rates, if necessary.

“Until we approve a different lifeline program or different rates, then we will continue what is being implemented by the distribution utilities and then we’ll also review existing, and depending also on the whatever will be the changes if any to the IRR, then we will adopt and make the necessary revisions to the lifeline program, make it more targeted,” he said.

He said the lifeline rate provision will expire on June 26, 2011.

According to Juan, until the ERC receives the signed provision, it could not determine if the extension would be implemented immediately after its expiration next week.

“In the interim, we don’t know yet. Maybe it will already involve looking into the law, if the law can give a retroactive effect because it is remedial in nature or if it is curative or if its intention really is to extend the lifeline program effective June 26 then we can probably continue, it depends on the law that will extend the (lifeline program) and up to this time, we have not seen it. We have heard from Congress that they have already approved but we’ll just wait for the action of the President, we will just abide by what is in the law,” he explained.

Included in the Energy Reform Agenda of the Aquino administration is to revisit the EPIRA provisions including the lifeline rates, the mandated rate reduction loan on marginalized electricity consumers.

The ERC passed in 2008 a resolution on the lifeline rates allowing Manila Electric Co. (Meralco) to implement the discount.

Specifically, Meralco customers with an average monthly consumption of up to 20 kilowatt-hours (kwh) are free of charge or enjoying a 100-percent discount.

Customers with an average monthly consumption of 21 to 50 kwh are receiving a 50-percent discount.

Under this privilege, those customers with an average monthly consumption of 51 to 70 kwh are getting a 35-percent discount.

Meralco customers with an average monthly consumption of 71 to 100 kWh, on the other hand, are entitled to a 20-percent discount.

At present, there are about 2.1 million customers of Meralco under the lifeline rates. This accounts for about 45 percent of its residential customers.

On the contrary, lifeline subsidy whose threshold level is set by the ERC, is charged to all classes of customers to reduce rates of marginalized/low-income captive market end-users who cannot afford to pay at full cost.

 The EPIRA, passed in June 26, 2001, allows the lifeline subsidy to continue for a period of 10 years from the date of its implementation.