Power users may get credits for excess charges
IF an Energy Regulatory Commission resolution declaring the System Loss Charge as a government-mandated pass-through cost that should not form part of the gross receipts of generation companies, the NGCP and DUs, for purposes of the 12 percent VAT under the National Internal Revenue Code gets the nod of the BIR, the VAT on the system loss charge will be scrapped, giving immediate and direct relief to electricity users nationwide.
PHOTO courtesy of PHILIPPINE NEWS AGENCY
Electricity consumers may receive bill credits for excessive power charges incurred earlier this year after the Energy Regulatory Commission (ERC) ordered a correction of unusually high fees during the nationwide electricity market suspension.
The ERC said Wednesday that distribution utilities must pass on any resulting credits from the recalculation of charges covering 26 March to 30 April directly to consumers.
The move could relieve households and businesses affected by the excessive charges, although the actual amount of bill credits has yet to be determined.
“Electricity consumers should not be burdened by excessive charges arising from extraordinary market conditions. This corrective measure ensures that electricity market settlements are fair, transparent, and properly accounted for, with any resulting credits or adjustments reaching consumers,” ERC Chairperson and CEO Francis Saturnino C. Juan said.
Under Resolution No. 33, Series of 2026, the ERC ordered a one-time adjustment to correct unusually high line rental charges in the Wholesale Electricity Spot Market.
These charges arise from differences in electricity prices between where power is generated and where it is consumed.
The fees increased unusually during the nationwide electricity market suspension, when the government implemented a modified pricing system under Executive Order No. 110.
To correct the charges, the ERC directed the Independent Electricity Market Operator of the Philippines to recalculate the affected market transactions and submit the results for approval within 45 calendar days from the resolution's effectivity.
Once approved, IEMOP must issue separate statements detailing the adjustments to affected electricity market participants within three calendar days.
Distribution utilities will then be required to pass on any resulting net credits to their customers.
However, the ERC clarified that actual bill adjustments or credits will depend on the final approved calculations.
“Our priority is to ensure that corrective adjustments do not stop at the wholesale market level but are properly reflected in the charges borne by end-users. We remain committed to protecting consumer welfare while maintaining fairness and accountability across the electricity industry,” Juan said.
The regulator said the adjustment will also ensure that power generators, distribution utilities, and other market participants follow a uniform process for correcting charges incurred during the market suspension.
The ERC emphasized that the correction applies only to the 26 March to 30 April period and will not permanently change existing electricity market pricing rules.
The resolution takes effect immediately following publication in a newspaper of general circulation or the Official Gazette.