ERC: Refunds likely after fuel costs audit

Consumers may look forward to lower electricity bills and possible refunds once the Energy Regulatory Commission (ERC) completes its ongoing audit of fuel charges passed on by power distributors.

“Once this is cleaned up by the Commission, there should be a refund. They shouldn’t have charged those costs. This is an opportunity for rates to go down,” outgoing ERC chairperson and CEO Monalisa Dimalanta said in a recent interview with reporters. 

The fuel audit, which began in November 2022, was prompted by findings that some distribution utilities and electric cooperatives had been charging consumers without proper documentation. 

“It was revealed that some electric cooperatives and distribution utilities weren’t asking for fuel invoices from suppliers before charging consumers,” Dimalanta said.

She noted that over 60 percent of the country’s power supply comes from coal and gas plants, where fuel costs are typically passed on to consumers, subject to strict conditions. 

Show cause orders issued

“The Commission’s approvals allow passing through fuel costs, but it must be ensured that no one is profiting from the fuel. The Commission’s standing condition is always whichever is lower,” she explained.

The ERC has already issued show cause orders to several firms, with some having submitted their responses. “Our point is, you shouldn’t have charged without a basis. The review is still ongoing,” Dimalanta said.

She added that the Commission aims to resolve parts of the audit by year-end. “Our target is to resolve some of these by the end of the year because there are so many.”

The ERC chief also emphasized that improved discipline across the power sector could bring even greater relief to consumers.

“There’s still plenty of room to lower rates if everyone exercises discipline under their respective mandates.”

Last week, Dimalanta decided to cut short her tenure at the Commission, submitting her irrevocable resignation to the Office of the President. 

She said she has no plans of returning to government service. Instead, she hopes to return to teaching, pursue consultancy work, and spend more time with her family.