ERC Places Private DUs’ Rate-setting Rules Under Review

The Energy Regulatory Commission (ERC) has issued the 2nd Draft of the proposed Rules for Setting Distribution Wheeling Rates (RDWR) and the 2nd Draft of the Issues Paper on the Regulatory Reset for the July 2022 to June 2026 Fifth (5th) Regulatory Period for the First Entry Group of Privately Owned Distribution Utilities subject to Performance Based Regulation.  The said draft policies are downloadable from the ERC’s website (www.erc.gov.ph) for the  interested parties’ comments and scrutiny.  

“We encourage the electric power industry stakeholders to submit their comments or inputs on the 2nd Draft of the proposed Rules for Setting Distribution Wheeling Rates (RDWR) and on the 2nd Draft of the Issues Paper.  The comments shall become part of the records of the rule-making proceeding and shall be considered in the finalization of the proposed RDWR,” ERC Chairperson and CEO Agnes VST Devanadera averred.

The 2nd Draft of the RDWR considered and addressed the comments and concerns submitted by industry stakeholders on the 1st Draft of the RDWR that was published in June 2019.  Once finalized and promulgated, the revised RDWR will provide the framework for the ERC’s evaluation of the private DUs’ revenue applications and ensure that the rates that will be charged to their customers are just and reasonable.  

Corollary to its efforts to revise and update the RDWR, the ERC also seeks the assistance of prospective technical consultants that will assist the regulatory agency in the review of the roll-forward of the Regulatory Asset Base (RAB), CAPEX and OPEX Forecast, and Regulatory Weighted Average Cost of Capital (WACC) for the 5th Regulatory Period.

Comments on the proposed RDWR will be accepted until 12 April 2021 which may be submitted electronically to docket@erc.ph and records@erc.ph, copy furnish the Legal Service and the Regulatory Operations Service through legal@erc.ph and tariffs@erc.gov.ph.

“The ERC’s review of its existing policies and rules is aimed at making the rate setting mechanism, simpler, less complicated and more responsive to the evolving electric power industry,” ERC Chair Devanadera concluded.