Sta. Rosa, Laguna Rep. Dan Fernando on Sunday called for an end to unfair electricity costs as the Energy Regulatory Commission (ERC) vows to recompute the weighted average cost of capital (WACC).
He said an end is imminent to the unfair and wrong computation of power transmission cost that has inflated electricity costs in the country.
This, after ERC officials assured the House of Representatives that they would start “the process of resetting” of the transmission wheeling rates that will include the computation of the WACC and the valuation of the regulatory asset base (RAB).
“We are happy that finally after seven years, justice will be served to the aggrieved consumers. Through our persistent calls for the adoption of the lawful computation of the transmission rate, ERC pledged to start the process of re-computation, which should be based on 6.84 percent and not the current 15.04 percent WACC,” Fernandez said.
During a recent hearing in Congress, ERC officials led by ERC chair and CEO Monalisa Dimalanta assured lawmakers that her agency would implement the amended rules for setting transmission wheeling rates (RTWR).
She said the last reset completed by the ERC was for the fourth regulatory period covering 2010-2015.
“For seven years we were made to suffer from the wrong transmission rate that is reflected on our electricity monthly bills,” Fernandez lamented.
He said the ERC has been committing a grave injustice to Filipino consumers for granting a high WACC of 15.04 percent in their computation of the cost of electricity instead of an average of just over 6 to lower 9 percent.
Fernandez reminded Dimalanta that the 6.84 percent WACC for transmission rate that should have been adopted by the ERC was the one reflected in the Transco report on July 23, 2018, submitted by its former president Melvin Matibag.
He said the rate was never adopted by ERC and if adopted the consumers would have to be refunded at least P60 billion.
The WACC for distribution companies, such as the Manila Electric Co., should be re-computed immediately as well.
“For seven years, Meralco and similar power distributors were allowed to collect distribution cost from consumers based on a high and unconscionable WACC of 14.97 percent. Former ERC consultant Romulo Neri was commissioned to compute it and he came up with a lower regulatory WACC of 8.5 percent, or a disparity of over six percent,” Fernandez said.
If the ERC would adopt the Neri computation for the fourth regulatory period for 2016-2022, this would trigger a refund of no less than P105 billion to consumers and will lower distribution rate starting 2023 for Meralco alone, he noted.
He lauded the ERC for its assurance but called on the public to be vigilant in making sure that this would be implemented.
He said he has directed his legal staff to study if ERC officials could be held liable for the high rate of electricity.
