Outgoing ERC chief sees more room to cut power rates

Outgoing Energy Regulatory Commission (ERC) chairperson and CEO Monalisa Dimalanta said electricity rates can still go down, with reforms already showing results and expected to continue under the next administration.

“After 10 years, this year — starting January 2023 — our generation charges in the Wholesale Electricity Spot Market (WESM) have gone down and are being passed on to consumers,” Dimalanta said in a media briefing Friday. “From January until May, we’ve seen significant lowering of rates in most regions of the country.”

ERC data showed average generation and residential rates have dropped since January 2023. In May, Metro Manila’s average generation charge fell to P7.5 per kilowatt-hour (kWh) from P7.8/kWh in April. Most other regions also posted declines, except MIMAROPA and BARMM.

Better spot market conditions

Dimalanta attributed the lower rates to better spot market conditions, cheaper imported fuel, and a stronger peso.

She also pointed to improved sector coordination and reforms like the Retail Aggregation Program (RAP), which lets large users access cheaper power.

Launched through a circular last year, RAP is starting to benefit residential consumers in condominiums and could soon expand to subdivisions. “RAP is the practice stage — it’s a staging area,” she said, adding the ERC aims to bring it to the household level within two to three years.

Fuel audits

To improve billing transparency, the ERC started requiring fuel audits in November 2022. “There were findings that some electric cooperatives and distribution utilities weren’t requesting fuel invoices from suppliers before charging consumers,” Dimalanta said.

“The Commission’s rule has always been: whichever is lower. We issued show-cause orders. Some have already responded. Our point is, you should not have charged it if there was no basis. The review is still ongoing,” she said.

“Once the Commission completes this, there should be a refund. They shouldn’t have charged it. This is one opportunity to lower the bills,” she added.

“There’s still a lot of room to bring rates down if everyone is disciplined within their respective mandates,” Dimalanta said. “Our target is to finish some of these by the end of the year because there’s a lot.”

No more government work

As she steps down, Dimalanta said she plans to return to teaching.

“No more government work. I hope to go back to teaching if universities will still have me. I plan to teach, do consultancy work — I still have a lot to finish. I plan to rest and make up for lost time with family and friends.”