A consumer group in Iloilo City sought the help of the Energy Regulatory Commission (ERC) to look into alleged system loss overcharges by the city’s power distributor.
Koalisyon Bantay Kuryente (KBK) on Friday filed with the regulator a complaint against Razon- led MORE Electric and Power Corp. (MORE Power) for the supposed 60% increase in system loss charges in the past billing months.
In a virtual briefing, it also alleged the company of breaching the government-mandated cap in system loss, which the ERC pegged at 6.25% for the utility.
MORE Power’s system loss rate in its May bills increased to P0.7612 per kilowatt-hour (kWh) from April’s P0.4719/kWh, it noted based on consumer bills.
According to its computation, multiplying the rate by the city’s monthly average power consumption of 54,000 megawatt-hours, the utility is estimated to have collected around P41 million in said charges.
“From April to May, there is a staggering increase of 60% in the system loss charges collected from consumers of Iloilo. These are indications that MORE has already exceeded the cap being imposed by the ERC,” said Estrella C. Elamparo, the group’s legal counsel, who also advises Panay Electric Co., Inc. (PECO), Iloilo City’s former power distributor.
“The actual increase from one bill to the next is huge. Where did that come from? That is a question that MORE must address and answer,” Marcelo U. Cacho, PECO’s head of public engagement and government affairs said in the same briefing.
Mr. Cacho said the amount represents an estimated overcharging of over P13 million when compared to PECO’s system loss rate at P0.5178/kWh previously.
Adding what MORE Power supposedly collected from system loss recoveries in July – estimated at P7.7 million – it may have over-collected P20.9 million from consumers, he added.
The June rate was out of the computation as bills for the month are yet to be delivered, the consumer group noted.
“(S)hould it be confirmed that they have been charging the hapless Iloilo consumers for systems loss over and above the cap imposed by the commission, MORE should be made to refund the excess charges to the consumers,” KBK said in its complaint.
MORE Power’s franchise may also be investigated should it be proven to have overbilled consumers, Ms. Elamparo said.
Last week, the Energy Regulatory Commission (ERC) confirmed that MORE Power’s system loss charges in June, the amount recovered from consumers from generated power that dissipates during distribution, is at 6%, which is below the maximum cap.
MORE Power recently said in a statement that it would bring down system loss charges over the next three years as it undergoes modernization.
In 2018, the ERC ordered the gradual reduction of system loss charges. By 2021, private electricity distributors will charge up to 5.50% for system loss recovery from a 6.50% cap, while electric cooperatives will recover the cost at an 8% limit in 2022 from 12%.
The commission has based its mandated caps on load density, sales mix, cost of service, delivery voltage, and other technical considerations.
The latest power rate issue comes as Iloilo City is also facing frequent outages and delayed electric utility deliveries. — Adam J. Ang