ERC sets lower distribution rate for Mindanao's Cepalco

MANILA, Philippines - After approving a lower revenue cap for Manila Electric Co. (Meralco), the Energy Regulatory Commission (ERC) has set a lower distribution rate for Mindanao-based Cagayan Electric Power and Light Co. (Cepalco).

Starting next month, the ERC ruled that customers of Cepalco will be charged a maximum average price (MAP) of P1.2491 per kilowatthour (kWh), is substantially lower by 32.14 centavos lower than the prevailing 2011 MAP which amounts to an average of P1.5705 per kWh.

For the years 2012 to 2015 Cepalco has applied for rates, ranges from P1.6296 per kWh to P1.8138 per kWh which is higher than the ERC 2012 approved MAP.

With the issuance of the final determination, Cepalco can now translate the approved MAP of P1.2491 per kWh for 2012 into rate schedules for its different customer classes and file its application with the ERC for approval. 

Upon approval of these revised rate schedules, Cepalco can start charging the lower rates to its customers.

 “The decreasing price trend on the third regulatory period for Cepalco is a good signal that the benefit of adopting the PBR rate-setting methodology is now taking effect,” ERC chairperson Zenaida G. Cruz-Ducut said.

Ducut said “the performance-based rate (PBR) has put pressure on the utilities to improve their systems and be more efficient in their operations. We are optimistic that the consumers will continue to enjoy the benefit of the PBR in terms of quality and reliable service and more affordable electricity rates.”