ERC orders Pampanga power distributor to refund consumers

Mayor Vilma Caluag (center), city administrator Nelson Lingat (left) and lawyer Jet Teodoro, city legal officer, address the impending power rate hike in City of San Fernando, Pampanga province and the alleged violations of the local power distributor during a media conference on Thursday afternoon, Feb. 2. (INQUIRER / Jun A. Malig)

CITY OF SAN FERNANDO, Pampanga–The Energy Regulatory Commission (ERC) has ordered the power distributor in this capital city of Pampanga province to refund the excess generation fees it collected from consumers since 2014 after finding that its contract with a power generation firm was not authorized by the regulator.

In its order on Jan. 27, the ERC said it did not issue a provisional or final approval on the application for a power supply agreement (PSA) entered in 2013 by the Aboitiz-owned San Fernando Electric Light and Power Co. Inc. (SFELAPCO) and its sister company, the Aboitiz Power Renewables Inc. (APRI).

Monalisa Dimalanta, ERC chair and the chief executive officer said SFELAPCO violated provisions in Republic Act 9136, or the Electric Power Industry Reform Act (EPIRA), particularly the rules and guidelines for the recovery of costs for the generation component of distribution utilities’ rates.

The ERC said it issued a show cause order (SCO) in December 2021 against the power distribution company, directing the latter to submit within 15 days from receipt of the order an “under oath” explanation for possible violations of the said guidelines.

“To date, 407 days since the promulgation of the SCO, the commission has yet to receive SFELAPCO’s compliance and explanation,” Dimalanta said in the order.

On its website, SFELAPCO posted a breakdown of its generation charge for December 2022.

It showed that all 53,043,271-kilowatts per hour (kWh) for last month were purchased at P4.33 per kWh from APRI.

In its Jan. 27 order, ERC ordered SFELAPCO to refrain from charging or collecting from its consumers’ generation rates higher than the National Power Corporation Time of Use (TOU) rate in Luzon, which differs every hour of the day.

The ERC also ordered the power distributor to immediately refund all generation rates collected in excess of the TOU rate from January 2014 up to the last billing period prior to the order. But the amount of the refund was not indicated in the order.

SFELAPCO was also directed to submit a “verified explanation” and show cause why it should not be held liable and why no administrative penalty should be imposed on the power distribution company for its alleged violations.

According to the ERC, SFELAPCO had also violated EPIRA’s provision on the obligation of a power distribution company to supply the electricity in the least cost manner to its market.

Compliance

In a text message to the Inquirer on Thursday, SFELAPCO corporate communications head Irwin Nucum said his company would comply with ERC’s order.

“Whatever the directive of the ERC, we will comply,” he said, adding that the power distribution company’s lawyers were already taking care of the matter.

The ERC said its order against SFELAPCO was based on the Jan. 24 letter of San Fernando Mayor Vilma Caluag, who requested that the regulator help prevent the impending generation rate increase in this city beginning in February this year.

On Jan. 26, this city’s Mayor Vilma Caluag personally handed over her letter to Dimalanta at the ERC head office in Pasig City, asking the commission to intervene in the power rate increase to be imposed by SFELAPCO this February.

The power distribution company had announced on its social media page that the generation charge it imposes on its consumers would increase starting Feb. 1 after its contract with the power generating company expired in December 2022.

According to the local government, SFELAPCO had reportedly entered a new supply agreement with another power-generating company.

SFELAPCO also cited as reasons for the rate hike the 400-percent increase in the price of imported coal and the low peso-dollar exchange rate as it asked consumers to be “more prudent” in consuming electricity.

Caluag said the local government could not immediately determine the amount of the refund that the consumers would get as a result of the ERC order.

“But we have already contracted the services of a consultant who will advise us on the figures,” she said during a press briefing on Thursday.

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