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ERC fines Samar, Laguna power co-ops

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THE Energy Regulatory Commission (ERC) has fined electric cooperatives in Samar and Laguna for failing to remit on time their collected feed-in tariff allowance (FiT-All) to state company National Transmission Corp. (TransCo), the administrator of the funds.

In its decision, the commission fined Samar I Electric Cooperative, Inc. (Samelco I) and First Laguna Electric Cooperative, Inc. (Fleco) P100,000 each for violating Sec. 2.2.7.1. of ERC Resolution No. 24, Series of 2013, which adopted the guidelines on the collection of the FiT-All and the disbursement of the FiT-All fund.

The ERC had issued a show-cause order to the two electric cooperatives that was prompted by a complaint from TransCo on April 20, 2015 after the first implementation of the FiT-All’s remittance to the FiT-All fund.

“The Commission finds the explanation of [Samelco I and Fleco] unmeritorious,” the ERC said in its decision dated May 8, 2018 and docketed earlier this month.

The FiT-All is a uniform charge applied to the kilowatt-hours billed to consumers who are supplied with electricity through the country’s power distribution or transmission network.

The uniform charge is paid to developers of renewable energy power plants. The FiT-All mechanism aims to jumpstart the development of new power sources such as wind, run-of-river hydropower, solar and biomass plants.

TransCo’s letter to the ERC prompted the commission to issue a show-cause order to distribution utilities — including Samelco I and Fleco — for their failure to comply with an order provisionally approving the collection of a FiT-All of P0.0406 per kilowatt-hour starting in the January 2015 billing of all on-grid electricity consumers.

On June 25, 2015, TransCo submitted to the ERC a summary of actual implementation dates of the FiT-All collection agents. The company also prescribed the submission of reports on energy sales and FiT-All receivables, collection and remittance monitoring.

TransCo said it had reached out to the collection agents for them to comply, but despite its efforts, they did not respond.

On Sept. 29, 2015, the ERC issued a show-cause order directing Samelco I and Fleco to submit within 15 days from receipt, their explanation under oath on why no administrative penalty should be imposed on them, and/or criminal action against their directors and officers.

In their explanation, the electric cooperatives said they had started billing their customers, but collections were remitted to the “universal charge-missionary” fund for lack of guidance as to where the remittance should be made.

Although subsequent monthly FiT-All collections had already been segregated, the cooperatives said they had experienced “very low collection efficiency,” particularly from local government units that have sizable unpaid accounts.

Consequently, remittance of FiT-All collections could not be made on time as they were constrained to prioritize payment to power suppliers in order to avoid disconnection of service, and avoid penalties and surcharges.

ERC said the reason given by the cooperatives for not remitting its collections within the required time frame was not acceptable. It said the confusion involved only the earlier months of implementation. It also said the alleged “lack of guidance” as to where the remittance should be made “is not a convincing reason for [them] to remit on time.”

“There are many ways to obtain this information had [the cooperatives] only been more resourceful,” the ERC said. — Victor V. Saulon