The Energy Regulatory Commission said Wednesday it ordered the creation of a restricted fund by the distribution utilities where over-collections are maintained and earmarked to repay customers in subsequent billing months.
The ERC issued Resolution No. 14, Series of 2022, which calls for the creation of a restricted fund. This is a mechanism where DUs, including electric cooperatives, will be able to implement more timely refund without being subjected to regulatory lag under certain conditions.
Article 5 Section 2 of the resolution states that the DUs should submit to the ERC, every 31st day of May an annual bank statement or statement of account detailing the account transactions during the year.
The ERC said this would be a part of efforts for a more transparent collection of pass-through costs or charges by distribution utilities in 2023. Pass-through costs are collected by DUs for charges other than the distribution charge or the payment for the use of the DUs facilities.
The DUs collect these amounts from electricity consumers and pay the power generation companies for energy generated and the system operator for the use of transmission facilities.
Other pass-through charges include taxes, feed-in tariff allowance and universal charge which are remitted to the government. The principle of “pass-through” dictates that the DUs should not gain or lose from these charges.
The pass-through costs to be collected under the 2022 revised rules cover generation charges, or the payment for the supply of electricity; transmission charges, or the payment for the use of the high voltage transmission grid; and other subsidies and mandatory payments, such as lifeline and senior citizen subsidies, mandated by laws, system loss; and other pass-through costs as may be approved by the commission.
“We are looking forward to 2023 as the beginning of an era of greater transparency in electricity pricing. The new URR [uniform reportorial requirement] form will allow more information to be available and accessible,” ERC chairperson Monalisa Dimalanta said.
“This is the first step to the digital transformation we are undertaking in the Commission to speed up our processes and allow more predictability in regulation,” she said.