THE incoming chairman of the Energy Regulatory Commission (ERC) committed to clearing the backlog of rate reset applications within four years by streamlining the review process.
“Within four years, we will complete the rate reset of all private distribution utilities under the performance-based regulation,” ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said during the turnover ceremony on Thursday.
Mr. Juan hopes to streamline the rate reset process by revising the rules for setting distribution wheeling rates.
Under the Electric Power Industry Reform Act (EPIRA) of 2001, the ERC is tasked with establishing the method for setting transmission and distribution wheeling rates. The rates must be set in a way that allows the recovery of “just and reasonable costs and a reasonable return on rate base,” enabling the entity to operate viably.
The rate reset process is typically a forward-looking exercise that requires the regulated entity to forecast expenditures and propose projects over a five-year regulatory period. The ERC assesses the actual performance of the entity and adjusts rates as needed.
Mr. Juan said that the process should be streamlined by proceeding directly to the release of the decision instead of undergoing draft consultations.
“If possible, once the hearings are done and all documents and evidence have been submitted, the ERC should go ahead and make a decision,” he said. “If the utility is not satisfied or wants something changed, it can still file a motion for reconsideration.”
Mr. Juan is set to take the helm of the ERC on Aug. 8, replacing the outgoing Monalisa C. Dimalanta, who submitted her irrevocable resignation in July.
Separately, in a notice, the ERC rejected the joint application of Province of Siquijor Electric Cooperative (Prosielco) and S.I. Power Corp. (Sipcor) to implement their supplemental agreement.
The ERC instead, directed the firms to comply with their obligations under the original power supply agreement, which was approved in 2012.
“Upon evaluation, the Commission determined that the supplemental agreement effectively amended the original agreement that was approved by the Commission, and there was already a commitment to supply what they wanted to cover in the supplemental agreement,” Ms. Dimalanta said.
“So, it seems the Commission no longer saw the necessity for that supplemental agreement if they comply with the original agreement,” she said.
Mr. Juan said that the power issue in Siquijor will be one of the first items the Commission will tackle during his term.
“We will study what the best course of action is to protect the interests of the consumers in Siquijor,” he said. — Sheldeen Joy Talavera