Press Release
January 16, 2021

Gatchalian to ERC: Demand refund if Visayan Electric's charges are unjustifiable

Senator Win Gatchalian said a refund should be in order if it will be proven that a violation has been committed by the Visayan Electric Company (VECO) because of its high cost of electricity.

Gatchalian took note of the January 4, 2021 directive issued by the Energy Regulatory Commission (ERC) to VECO demanding an explanation on the high cost of electricity specifically citing that from January to October 2020, the power purchases made from Cebu Private Power Corp. (CPPC) averaged at Php35.3853 per kilowatt hour (kWh), with generation rate spiking significantly high at P1,470.90 per kWh for the month of September last year.

"Kung mapapatunayan na hindi makatwiran ang singil ng VECO, dapat ibalik nila ang binayad ng mga kunsyumer. Mandato ng ERC na protektahan ang interes ng publiko lalo na kung may pang-aabuso ngang nagawa," Gatchalian said.

The senator also took note of Section 23 of the Electric Power Industry Reform Act (EPIRA) specifying that distribution utilities (DUs), VECO included, have the obligation to supply electricity in the least cost manner to its captive market.

CPPC is just one of the four independent power producers (IPP) supplying the energy requirements to VECO. The other three are Green Core Geothermal Inc. (GCGI), Cebu Energy Development Corporation (CEDC) and Therma Visayas Inc. (TVI) whose power purchases averaged only at Php5.5584 per kWh, Php4.8922 per kWh and Php5.6821 per kWh respectively, from January to October 2020.

ERC Chairperson and Chief Executive Officer Agnes Devanadera directed VECO to explain its high electricity rates last year and its perceived violation of Section 45 (b) of the EPIRA, which provides that "no participant in the electricity industry or any other person may engage in any anti-competitive behavior including, but not limited to, cross-subsidization, price or market manipulation, or other unfair trade practices".

The ERC acted on the complaint made by the Cebu Chamber of Commerce Inc. (CCCI) last December, coursed through the Regional Development Council in Central Visayas (RDC-7), claiming that the high cost of electricity is proving to be a major stumbling block in boosting the business competitiveness of the region.

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