ERC seeks comments on rate- setting frameworks of utilities

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    The Energy Regulatory Commission (ERC) has issued the second draft of the proposed frameworks on rate-setting of distribution utilities (DUs).

    The regulatory body is seeking comments on the proposed rules for setting distribution wheeling rates (RDWR) as well as on the issues paper on the regulatory reset for the July 2022 to June 2026 fifth regulatory period for the first entry group of privately- owned DUs subject to performance-based regulation.

    “The comments shall become part of the records of the rule-making proceeding and shall be considered in the finalization of the proposed RDWR,” said Agnes Devanadera, ERC chairperson and chief executive officer, in a statement.

    Once finalized and promulgated, the revised RDWR will provide the framework for the evaluation of private DUs’ revenue applications and ensure rates charged to customers are just and reasonable.

    The proposal will also amend the original RDWR issued back in 2004 for another that can be issued for any changes to rules as deemed necessary by the ERC.

    The regulatory body will be assisted by prospective technical consultants in the review of the roll-forward of the regulatory asset base, capital expenditure and operational expense forecast and the regulatory weighted average cost of capital for the fifth regulatory period.

    “The ERC’s review of its existing policies and rules is aimed at making the rate setting mechanism, simpler, less complicated and more responsive to the evolving electric power industry,” Devanadera added.

    Stakeholder comments on the drafts will be accepted by the regulatory body until April 12.