ERC Establishes PSA Caravan in Laoag, Ilocos Norte

A Power Supply Agreement (PSA) Caravan was launched in Laoag, Ilocos Norte by the Energy Regulatory Commission (ERC) to get perspectives on the understanding of the challenges experienced by the distribution utilities (DUs) and consumers.

The PSA Caravan will be set in different areas of the country. After its stint in Laoag, the Caravan is scheduled to visit Iloilo and Cagayan de Oro.

The nationwide rollout of PSAs reviews as led by the ERC in collaboration with the Department of Energy (DOE), is targeted to aid electric cooperatives to inspect and plan out mid-term and immediate steps to tackle the high cost of electricity in the country.

“The PSA Caravan is the ERC’s grassroots-based efforts to evaluate primarily the generation component of consumers’ electricity bills,” mentioned the agency.

The generation charge makes up an estimated 60% of the power bill and accounts for the power costs generated and sold to DUs via companies that fall under PSAs or via the Wholesale Electricity Spot Market (WESM) which utilities provide for their consumers.

In August of this year, the generation charges have risen to above 20% in comparison to the figures for 2021. The rise in generation rate is fueled by the pass-through component of the rates for fuel costs, especially coal, and the high foreign exchange rates.

“The PSA caravan is here so we can look at your PSAs and find immediate and long-term solutions for the DUs to be able to sustain themselves and for the consumers also to enjoy lower electricity rates.

This is an industry-wide concern. That’s why we as regulators are now taking a proactive stance, and we are so happy that our new Chairperson Mona Dimalanta came up with this caravan. This is the first of its kind and we are happy to meet you all personally and for us to discuss on the table, the possible remedies that we would undertake,” mentioned ERC Commissioner Alexis Lumbatan.

Source: Business Mirror