The Energy Regulatory Commission said Wednesday it recently kicked off the power supply agreement caravan in Laoag, Ilocos Norte.
ERC chairperson Monalisa Dimalanta said the nationwide roll-out of review of power supply agreements or PSAs was an initiative led by the agency and the Department of Energy.
Dimalanta said the move would assist electric cooperatives in exploring and formulating immediate and mid-term measures to address the high cost of electricity in the country.
“We will look at and review, scrutinize the contracts,” Dimalanta said.
She said the caravan brought together the ECs and suppliers with a view to helping consumers cope with rising fuel prices.
Dimalanta cited a case where an EC was 100-percent contracted, and discussions focused on securing supply from the Wholesale Electricity Spot Market when prices are lower than the contract.
The PSA caravan is the ERC’s grassroots-based effort to evaluate the generation component of consumers’ electricity bills primarily.
The generation charge constitutes almost 60 percent of the power bill. It accounts for the cost of power generated and sold to distribution utilities by generation companies under PSAs or through the WESM, which the utilities then supply to their captive customers.
ERC records showed that generation charges increased by more than 20 percent this year from a year ago.
The rate increase was driven by the pass-through (non-fixed) component of the rates for the cost of fuel, specifically coal and the upward adjustment in the foreign exchange rate.
“The PSA caravan is here so we can look at your PSAs and find immediate and long-term solutions for the DUs to be able to sustain themselves and for the consumers also to enjoy lower electricity rates. This is an industry-wide concern. That’s why we as regulators are now taking a proactive stance,” ERC commissioner Alexis Lumbatan said.
“This is the first of its kind, and we are happy to meet you all personally and discuss on the table, the possible remedies that we would undertake. This is just the start of a collaboration by the regulator and all stakeholders, moving forward, meeting and facing head-on the challenges of high power rates,” he said during the caravan.
The ERC delegation, composed of representatives from the commissioners’ offices and from different units involved in the evaluation of the PSA, was joined by the DOE representatives. DOE and ERC collaborated in addressing the concerns of the various ECs.
The open forum brought out many insights and best practices that garnered a productive exchange of possible solutions from the participant ECs.
The ECs that participatied in the caravan included Central Pangasinan Electric Cooperative Inc., Ilocos Norte Electric Cooperative Inc., Ilocos Sur Electric Cooperative, Pangasinan III Electric Cooperative Inc., Abra Electric Cooperative Inc. and Mountain Province Electric Cooperative Inc.
“The PSA Caravan seeks to enable the cooperative to go to the next level in terms of commitment to our people, the consuming public. If our efforts will lead to lowering power rates, at this point in time, considering the circumstances, I think that aside from our mandate, it is more of a personal fulfillment for us because at the end of the day, we are all power consumers,” said Lumbatan.
The PSA Caravan will be held in strategic locations to cover all the regions of the country. The caravan is rolling in Cagayan de Oro for the discussions with ECs from Region X.