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LKI 2020-040 on ECQ in Cebu and ERC guidelines

July 3, 2020



Consumer Group Laban Konsyumer Inc. (LKI) recently wrote to Hon. Lord Allan  Jay Velasco, Chairman of the Committee on Energy, in Congress, Quezon City, regarding the July 2 2020 Public Hearing on Electricity Bills, saying “In the ongoing deliberation on electricity bills, permit us to respectfully present to the Honorable Committee for its consideration  our opinion that  the bill shock occured and happened partly due to an ambigous advisories issued by the Energy Regulatory Commission.”

LKI reiterated this point when they were given time to speak during the actual Public Hearing, highlighting that “consumers could have been relieved of this additional burden if there was no ambiguity of the advisory on ESTIMATE BILL and the lack of implementing details of the Energy Regulatory Commission (ERC). If there was more clarity in the guidelines and advisories of the regulator, the confusion and stress consumers are feeling now with their electricity bills may have been avoided.”

Leading to the upcoming Senate Hearing, Dimagiba said “we are observing that all agencies have been silent about what is going to happen to electric consumers in Cebu. ERC/DOE have already seen how estimated bills created confusion among consumers. With Cebu, covered by Visayan Electric, still under ECQ, there is still no solution given by DOE and ERC. Even during the House hearing, yesterday, nobody asked what is going to happen to Cebu power consumers. This is a valid issue that shows there have been no learnings or adjustments by the DOE and ERC with their advisories. Chair Agnes herself admitted that their current rules did not foresee being applied in situations like the pandemic.”

LKI explained that “The latest ERC advisory of May 26, 2020 affirmed our opinion when it required the computation of the ESTIMATE BILL based on the 3 months actual consumption prior to the lockdown. That meant that the DUS and ECs used actual kWh consumption   from November 2019 to March 15, 2020. Even when the consumers shut down his work office or simply stayed home, the Estimate bills for March and April 2020 will show a higher kWh consumption as the months of November 2019 to February 2020 were peaked months in kWh usages primarily due to the long traditional holidays of the country. As we had learned, when the May 2020 bills were issued, the kWh consumption shot up as these included the March and April 2020 estimate consumption computed in accordance with an ambiguous ERC advisories. The adjustments of the kwh consumption made the whole process circuitous.”

Dimagiba highlighted in the recent hearing that “Our group believes that the lack of implementing details created confusion and lack of clarity provided to the distribution utilities and electric cooperatives all around the Philippines. These DUs and ECs nationwide were left to implement their own estimation without any clear details or guidelines by the ERC, and this may have brought about confusion both on the end of the DUs and ECs, and also on the part of the consumers.”

The group explained “Just as ERC warned and issued Show Cause Orders on all DUs and ECs to comply with their directives, the ERC also owes to the consumers to be accountable for the consequence of an ambiguous advisory. We are writing this for your good office to take into consideration possibly that the attention and/or accountability should not focused only on the DUs or ECs themselves during the bill shock experience of consumers, but rather focused on the ERC for the lack of clarity in this pandemic and lockdown period.” 

In his letter, Dimagiba detailed how “It was stated in the ERC advisory that  the utilization of estimated billing may be applied, provided that the word “ESTIMATE” be clearly written on the consumer bill (Item No. 3 of 26 March 2020 Advisory, Item No. 4 of 15 April 2020 Advisory, and Item No. 5 of 5 May 2020 Advisory) but it was not very well-defined on how the meter reading and estimation will go about, and how the DUs and ECs will carry out this estimation process. So, from our observations, the DUs and ECs complied with this advisory to the best of their ability but without solid and granular directions, perhaps there came a foot some complications with regards to how consumers saw and understood their bills.   Only in the Joint Committee on Energy meeting did Meralco present a 2-step process to understand our bills. Yet, that Meralco presentation can hardly cascade to the understanding of the bulk of residential customers of Meralco.” 

Dimagiba expounded how “In 2 media interviews I did recently, one on radio and on TV, at the height of the lockdown,  I raised the ambiguity of the ERC advisories, as well as proposed that it could be simpler if ERC adopted the present reading less the previous reading formula  , and then offered consumers a 4 or 6 month installment payment  scheme. Stated otherwise, it was a hard-sell to consumers to pay for Estimated Billing.”

LKI concluded their statement by saying “In line with this, as we continue to learn lessons from the Covid-19 pandemic, and we would appreciate for a study, analysis and investigation of the House on the ERC oversight and room for improvement, in terms of releasing the advisories and applicable guidelines during times of crisis, so that consumers may be better protected and their welfare may be preserved as well as better informed.