ERC proposes deferment of collection of generation charge

By July 13, 2021Inside News

THE Energy Regulation Commission (ERC) has recommended to the Dagupan Electric Corporation (Decorp) to seek its authority to defer the collection of increased generation charge it billed in June this year and to schedule easy staggered payment by consumers monthly.

This was the solution offered by Nelson Canlas, ERC representative who attended the zoom session on July 7 of the Sangguniang Panlungsod in connection with its inquiry in aid of legislation over the recent high electricity billing of Decorp that enraged its customers.

Canlas sustained the explanation of Decorp that the increased generation charge stemmed from last month’s low power supply while the demand for electricity was high due to the scheduled shutdown of some power plants for their yearly maintenance.

He said 42 percent of the power requirement of Decorp in June was sourced from the Wholesale Electricity Spot Market (WESM), which was why the generation charge was high.

“One solution is for Decorp to ask the ERC to defer the collection of the increased generation charge and to collect the same from consumers on staggered basis monthly,” said Canlas.

Canlas said this arrangement is not new since other distribution utilities already adopted the scheme when they bought power at higher costs when there was yellow and red alert.

Councilor Luis Samson Jr. asked on why not Decorp shoulders half of the increased generation cost and half by the consumers as a happy compromise to ease the burden of consumers in this time of the pandemic.

In answer to Samson, Augusto Sarmiento, network manager of Decorp, said the distribution utility does not subsidize the generation charge nor the transmission charge. All sectors undertake their own costs and impose their own rates.

The generation charge goes to the power supplier or producer while the transmission charge goes to the National Grid Corporation of the Philippines (NGCP), the electricity highway in the entire country.

Sarmiento said Decorp already deferred P24 million of the generation charge, which would translate to 50 centavos per kilowatt hour, an amount that was not collected and if Decorp did the generation charge would have been P7 per kwh instead of P6.59 per kwh.

He added that while Decorp can only collect from customers after two months, WESM demands payment of power in advance and if Decorp cannot pay, the amount will be chargeable from its security deposit, a rule applied to all distribution utilities.

Councilor Jose Netu Tamayo authored the resolution asking Decorp to suspend the collection of its high generation charge and not to serve disconnection notices to consumers that cannot settle their accounts. (Leonardo Micua)

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