ERC orders Pampanga power firm SFELAPCO to pay consumers P655-M refund

Joann Manabat
ERC orders Pampanga power firm SFELAPCO to pay consumers P655-M refund

REFUND. The Energy Regulatory Commission has ordered the San Fernando Electric Light and Power Company, Inc (SFELAPCO) to refund its consumers in Pampanga P654.4 million for unauthorized pass-on of power supply costs.

Joann Manabat

The decision follows a February 2023 generation rate hike that San Fernando City Mayor Vilma Valuag says burdens consumers

MABALACAT, Philippines – The Energy Regulatory Commission (ERC) has ordered San Fernando Electric Light and Power Company, Inc (SFELAPCO) in Pampanga to pay its consumers a P654.4-million refund for excess charges collected from January 2014 to December 2020.

The March 3, 2023 ERC decision also imposed a P21.6 million penalty for SFELAPCO’s passing on to consumers the power supply cost of its contract with Aboitiz Power Renewable Inc. (APRI), without the government regulatory commission approving the agreement.

The regulatory body said the power firm’s actions violated Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, and the rules and guidelines for recovery cost in the generation component of distribution utility rates.

The SFELAPCO refund should be “immediate” within the next billing cycle from receipt of the decision, the ERC said. The power company should submit a refund scheme within 15 days of receipt of the decision.

Rappler tried to contact SFELAPCO but was asked to wait for a scheduled press briefing on Tuesday afternoon, March 14.

The City of San Fernando on March 14 shared a short statement on the ERC decision, saying Mayor Vilma Balle-Caluag had sought help following SFELAPCO’s generation rate hike in February. The mayor claimed it would raise consumer costs by 50%.

SFELAPCO, on January 2, 2013, filed an application for the approval of its power supply agreement (PSA) with Aboitiz Power Renewable Inc. (APRI).

It drew power from APRI between January 2014 to December 2020, passing on to retail customers the power supply cost from their PSA, according to the company’s uniform reportorial requirement (URR) submissions.

The ERC, however, said its records show no approval of the application.

The agency issued on December 20, 2021 a show cause order (SCO) to SFELAPCO – dated November 16 – to explain the inclusion in rate computations of the supply cost of electricity from the APRI.

After the lack of response from the power firm, ERC issued two more SCOs in January 2023, calling the SFELAPCO-APRI PSA an “ineligible” contract.

SFELAPCO’s verified explanation on February 13, 2023, claimed it only received the 2021 SCO on January 31, 2023.

It also justified using its PSA with APRI as the basis for power charges, citing the ERC’s policy of allowing contract extension and implementation without waiting for approval but using power rates approved by the commission.

SFELAPCO claimed that if it did not use the PSA, it would have been forced to tap from the “more expensive supply of electricity from the Wholesale Electricity Spot Market (WESM).”

The PSA application had been pending with the PRC since January 2013.

The ERC said SFELAPCO’s claim of non-receipt of the first SFO was “not tenable.” The power firm has a designated electronic e-mail address, a requirement governing applications, filings, and virtual hearings (during the two-year COVID-19 pandemic), the ERC pointed out.

While the commission has allowed the extension of an expired PSA, it said the move always comes with written authority, which SFELAPCO did not have.

The WESM prices from 2014 to 2020 were also lower than APRI generation rates, except for 25 months, the ERC decision said. The billing period covers 108 months.

The ERC decision also disputed the power firm’s formula in computing charges to consumers. –

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