The Energy Regulatory Commission has issued a resolution that will balance the protection of electricity consumers from overcharging and under recovery of distribution utilities.

Resolution No. 14, Series of 2022, titled "A Resolution Adopting the Revised Rules Governing the Automatic Cost Adjustment and True-Up Mechanisms and Corresponding Confirmation Process for Distribution Utilities" updates the regulatory framework on recovery of costs. It will be effective immediately next year.

"We are looking forward to 2023 as the beginning of an era of greater transparency in electricity pricing. The new URR form will allow more information to be available and accessible," ERC chairperson Monalisa C. Dimalanta said Wednesday.

The revision, she said, is the "first step to the digital transformation" that the Commission is undertaking to streamline processes.

Pass-through costs are collected by DUs for charges other than the Distribution Charge or the payment for use of the DUs facilities.

The DUs collect these amounts from electricity consumers and pay the generation companies for energy generated and the system operator for the use of transmission facilities. They should not earn from these collections.

Other pass-through charges include taxes, Feed-in Tariff Allowance or FIT-All and Universal Charge, which are all remitted by the DUs to the government.

Under the 2022 revised rules, the pass-through costs to be collected should only 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 like lifeline and senior citizen subsidies.

Recent policy developments that affect consumer bills such as Distributed Energy Resources, Green Energy Option Program, Net Metering, and Lifeline Program for Marginalized End-Users, among others, are also included in the 2022 Revised Rules.

Resolution 14, series of 2022, also directs the creation of a Restricted Fund by the DUs to avoid overcollection. The fund will be earmarked for repayment to customers in subsequent billing months.

To ensure that the revised rules are consistently followed, DUs are required to submit to the Commission, by the end of May, an annual bank statement or statement of account, detailing the account transactions during the year.