The Energy Regulatory Commission (ERC) of the Philippines has issued an advisory clarifying the rules for electricity billing adjustments during Force Majeure events under the Open Access Transmission Service (OATS) Rules. The advisory provides guidance on how transmission charges should be adjusted when unexpected events significantly affect or interrupt electricity transmission services.
The directive is based on ERC Resolution No. 03, Series of 2022, which approved the 2022 edition of the OATS Rules. The framework was introduced to provide a transparent approach to billing and ensure that transmission customers are not charged for services that could not be delivered because of circumstances beyond their control.
Under the rules, a Force Majeure Event includes situations officially classified under a “Red Alert” status. Such events may substantially reduce or completely interrupt transmission services to electricity customers. In these circumstances, transmission service providers are required to reduce their billing collections in proportion to the actual impact on service delivery.
The ERC clarified that the adjustment will not be implemented as a standard or fixed discount. Instead, the applicable reduction will be determined based on the actual conditions during the affected billing period. Authorities will assess the customer’s actual energy consumption and compare it with the customer’s average monthly consumption over the previous 12 months.
For instance, if transmission service is available at only 60% of normal levels during a Force Majeure event, the applicable transmission charges will be capped at 60% of the regular amount. This effectively represents a 40% adjustment to the eligible transmission charges. If transmission service becomes completely unavailable for an entire billing period because of a Force Majeure Event, no transmission charges will be collected for that period.
The ERC also emphasized that the adjustment applies only to specified transmission-related charges. These include Power Delivery Service charges, System Operator fees, Metering Service Provider charges and Ancillary Service fees.
The advisory does not provide for an automatic reduction in a customer’s entire electricity bill. Generation charges, local distribution charges, government taxes and other applicable components will continue to be governed by their respective regulations.
The final percentage adjustment and peso amount reflected in customer bills will be determined after verification of the affected period, actual metered consumption, the 12-month consumption baseline and the eligible transmission charges.
At the same time, transmission network providers and system operators may petition the ERC to recover under-collections affecting their Maximum Allowable Revenue as a result of the mandatory Force Majeure billing adjustments.
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