Thursday, September 21, 2006
Energy body orders power firm to refund consumers
By Victor L. Camion
THE Energy Regulatory Commission (ERC) ordered Negros Oriental 2 Electric Cooperative (Noreco 2) to refund its consumers the more than P60 million it collected without authority in the form of a Purchased Power Adjustment (PPA).
The commission said the unauthorized collection must be returned to the consumers "...starting the next billing cycle from receipt of the order until such time that the full amount shall have been refunded."
The refund would be a separate item in the bill to be called "Previous Years' Adjustment on Power Cost."
Copies of the ERC order have been given to at least 13 mayors within the coverage area of Noreco 2.
The order said that based on an ERC evaluation, Noreco 2 committed unauthorized collections amounting to P60,324,384.
It said the cooperative must accomplish and submit a report in accordance with the prescribed format attached to the order, on or before the 30th day of January of the succeeding year and every year thereafter until the amount shall have been fully refunded.
It confirmed that Noreco 2 collected a 20 percent system loss from its consumers instead of the 14 percent system loss cap following the implementation of the Energy Cost Adjustment (ECA) system from February 1996 to June 1999.
As a result, it said the cooperative enjoyed an over-recovery of P49,288,872.
Evaluation findings also showed that Noreco 2 collected a 20 percent system loss from February 1996 to June 2004, except March 1996, August 1996, January 1997, October 1997 to November 1997, January 1998, March 1998, and February 1999, amounting to P5,303,764.
ERC explained that the commission issued a provisional order on February 19, 1997 authorizing electric cooperatives to use and implement the approved PPA formula and directed them to submit relevant documents, including their respective monthly implementation reports for review, verification, and confirmation processing.
Noreco 2 complied with the order and submitted its monthly PPA implementation reports and other relevant documents, which showed that it implemented the PPA from July 1999 to June 2004.
It said ERC approved the cooperative's unbundling rate application on April 13, 2004 and implemented it in July 2004 based on the submitted sample bills.
However, Noreco 2 made use of the "multiplier scheme" from February 1996 to June 1999.
On January 14, 2005, the commission issued an order adopting a new PPA policy in which the computation and confirmation of the PPA prior to the commission's order dated June 17, 2003 would be based on the approved PPA formula, the power cost "net" of discount; and the power cost at "gross" reduced by the amount of discounts extended to costumers.
"Noreco II failed to comply with the commission's order dated January 14, 2005 directing all DUs to extend to their end-users the Power Factor Discount, Primary Voltage Discount, Excess and Below Contracted Demand and Power Purchase Discount (PPD) availed from the National Power Corporation and other power suppliers," said the ERC order.
Instead, ERC said, Noreco 2 granted a limited PPD only to its residential end-users resulting to an over-recovery of P14, 328, 902.
(September 21, 2006 issue)
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