ERC requires power distributors to submit detailed reports on rate hikes

The Energy Regulatory Commission (ERC) has directed distribution utilities (DUs) experiencing a significant increase in generation costs due to the fuel price shock resulting from the Middle East war to submit detailed reports to enable timely regulatory intervention and consumer protection.

In a statement on Saturday, the ERC said the directive was issued in response to the declaration of a state of national energy emergency under Executive Order 110.

The power industry regulator said its directive specifically applies to DUs with an increase in their blended generation rate of more than P1 per kilowatt-hour compared to the previous supply month. 

“These DUs are required to submit the basis for their rate adjustments, including detailed computations, supporting invoices from power suppliers, and any proposed staggered recovery schemes agreed upon with suppliers,” the ERC said.

“Submissions must be made electronically at least five days prior to the intended release of monthly consumer bills,” it added.

The commission said the directive forms part of the government’s broader efforts to cushion the impact of rising global fuel prices on electricity costs.

“By requiring advance submission of rate adjustments, the ERC aims to closely monitor price movements, validate cost increases, and determine appropriate mitigating measures before these are passed on to consumers,” it said.

The ERC said that for consumers, an increase of more than P1.00 per kWh in the generation charge can significantly affect monthly electricity bills, particularly for households with higher consumption or those already vulnerable to rising living costs. 

The generation charge, which typically accounts for the largest portion of electricity bills, fluctuates depending on the cost of power supply sourced by DUs. 

As fuel prices rise globally, generation costs also increase, leading to higher electricity rates.

The ERC said DUs in coordination with their suppliers are encouraged to submit staggered recovery schemes, allowing consumers to pay for the increase over a period of time rather than in a single billing cycle to ease the immediate financial burden on households while ensuring that legitimate costs are recovered in a manageable manner. —VBL, GMA Integrated News