ERC orders SFELAPCO to refund P654.4M to consumers

CITY OF SAN FERNANDO — The Energy Regulatory Commission has ordered Pampanga power firm San Fernando Electric Light and Power Company Inc. (SFELAPCO) to refund P654,397,381.48 million in generation rates that were collected from its consumers from January 2013 up to December 2022.

In a 23-page decision by the ERC dated March 3, 2023, SFELAPCO has also been ordered to pay the penalty of P21.6 million, 15 days upon receipt of the decision.

The decision also declared SFELAPCO as administratively liable for violation of Section 1, Article VI of the Guidelines for the Recovery of Cost for the Generation Component of Distribution Utilities Rates, and Section 2, Article 2 of Resolution No. 16, Series of 2009, known as “A Resolution Adopting the Rules Governing the Automatic Cost Adjustment and True-Up Mechanisms and Corresponding Confirmation Process for Distribution Utilities,” for all monthly billing periods from January 2014 to December 2022.

The ERC directed SFELAPCO to immediately refund the amount within the next billing cycle from receipt of the said decision.

The regulatory body said the proposed refund scheme is for the amounts corresponding to the portion of the generation charges collected in excess of the DU load-weighted average NPC TOU rate for the period of January 2013 to December 2022.

When asked for an interview by Pampanga News Now, SFELAPCO official Erwin Nucum said the power firm is preparing for a statement as of press time.

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

However, without the approval of the regulatory body, SFELAPCO implemented the unapproved PSA and collected from January 2014 to December 2022 from its consumers as stipulated in their uniform reportorial requirement (URR) submissions that it drew power from its supplier APRI and included the power supply cost in its retail rates to its customers.

It furthered that APRI’s supply for the period 26 December 2012 to 25 September 2015 cannot be considered as an ineligible contract. The supply provided was pursuant to the Commission’s policy of allowing contract extension and implementation without the need for any further regulatory approval, provided that the rates to be implemented shall be what the Commission has approved. The rate implemented by SFELAPCO is the Commission approved rate for the 2009 Power Supply Agreement (PSA).

Last December 20, 2021, ERC issued 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, ERC on January 27, 2023, issued two other SCOs for its “eneligbile contract.”

SFELAPCO claimed that they only received the 2021 SCO last January 31, 2023. 

Last February, SFELAPCO consumers decried the 50% increase in generation cost in their electric bills.