The Philippine Rural Electric Cooperatives Association (PHILRECA) has welcomed swift action by the Energy Regulatory Commission (ERC) to address persistently high line rental charges, a cost burden that has affected consumers in rural Visayas.

In a consultative meeting held March 2, PHILRECA, the ERC, the Federation of Rural Electric Cooperatives in Region 8 (FRECOR 8), the Independent Electricity Market Operator of the Philippines (IEMOP), and the National Grid Corporation of the Philippines (NGCP) discussed initiatives to mitigate these charges under the Wholesale Electricity Spot Market (WESM) pricing framework.

“Since 2023, there have been approximately five unusual spikes in line rental costs—now referred to as Line Loss and Congestion Costs (LLCC). Three of these incidents exceeded PHP 300 million each, all of which were shouldered by the MCOs of Region VIII,” said Atty. Edson G. Piczon, FRECOR 8 representative and General Manager of Samar I Electric Cooperative (SAMELCO I).

Atty. Piczon also expressed gratitude to the ERC for facilitating the discussion, noting that it “creates a collaborative environment aimed at safeguarding the welfare and interests of the MCOs.” He added, “FRECOR VIII expresses its appreciation to the Commission and to Chairman Juan that the proposed measures are already under deliberation and are expected to be issued soon.”

IEMOP proposed a more detailed allocation of the Total Net Settlement Amount (NSS) into three components: losses, congestion, and System Marginal Price (SMP), each assigned its own methodology calibrated to the corresponding Locational Marginal Price (LMP). The aim is to improve transparency, cost reflectivity, and settlement accuracy within the WESM framework.

PHILRECA lauded the ERC’s initiative, saying, “The Commission’s pursuit of providing relief to affected MCOs is a welcome development for the rural electrification sector. Reducing the adverse effects of high line rental charges will not only ease operational strain on ECs but will ultimately benefit concerned MCOs in the countryside.”

The association emphasized its commitment to continue engaging with the ERC and other stakeholders to ensure reforms are implemented efficiently, advocating policies that sustain the affordability, reliability, and sustainability of rural electric services.

How do you see these ERC reforms impacting line rental costs and electricity affordability in your region? Share your insights and experiences below.

Follow Power Philippines on Facebook and LinkedIn or join our Viber community for more updates.