ERC okays P1 power rate hike in La Union, Cebu, Davao

MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved petitions for a power rate increases of over P1 per kilowatthour (kwh) in La Union, Cebu and Davao.

After months of hearings and discussion, the rate adjustment was given the green light based on their respective distribution performance-based regulation (PBR).

The ERC approved a P1.30 per kilowatt-hour maximum average price (MAP) for the distribution rates of Visayan Electric Co. Inc. (VECO) effective July 2011 to June 2012.

VECO is the electric distribution company covering some 300,000 customers from Talisay City in the south up to Lilo-an in the north in the island of Cebu.

The approved rate hike was based on VECO’s P1.17 per kilowatt-hour MAP.

The decision was unpopular as opposition was lodge by the Trade Union Congress of the Philippines (TUCP), which argued that “the company is disguising the increase through the highly-complicated PBR formula of the ERC.”

Examples of basis for PBR include more efficient payment collection, reducing systems loss, faster line connection, faster responses to customer complaints, and restoring downed power lines.

The ERC approved a P1.27 per kwh power rate increase for Davao Light and Power Co. Inc. (DLPC), up from P1.16 per kilowatt-hour previously. DLPC is a member of Aboitiz Group of Companies.

DLPC corporate communications officer Rossano C. Luga, however, was quoted as saying that the new rates would take effect in the August billing.

In a statement, DLPC said the average increase for residential customers will be P0.1942 per kWh.

Luga said the lifeline subsidy discounts of the company that covers those consuming 20 or less kwh monthly will still continue. A third of Davao Light’s 287,000 residential customers avail of this privilege, the company said, or a fixed charge of P5 per month.

Meanwhile, the ERC likewise gave the nod for the P1.39 per kwh rate hike of La Union Electric Co. Inc. (LUECO) based on the petitioners MAP of P1.23 per kwh.

The approved petition of both DLPC and LUECO, likewise, has an effectivity period of July 2011 to June 2012.

The ERC’s nod to the utilities’ new MAP allows them to translate or define their approved price into different tariffs for their customer classes such as residential, commercial, industrial and government/street lights.

‘The increase in their distribution rates, or the line item in consumers’ electricity bills that go directly to the utilities’ pockets, is in accordance with their entry into PBR,” the ERC said in its decision.