Power firms urged to submit comments on RDWR rules
THe energy regulatory Commission (erc) is asking industry stakeholders to comment on the second draft of its proposed rules for Distribution Wheeling rates (rdwr).
The draft rules are meant to assure customers they are properly billed by distribution utility (DUS) firms.
The commission posted on its website the second draft of the proposed rdwr and the second draft of the “Issues Paper on the regulatory reset for the July 2022 to June 2026 Fifth regulator Period for the First entry Group of Privately Owned Distribution Utilities.”
“We encourage the electric power industry stakeholders to submit their comments or inputs on the 2nd Draft of the proposed rules for rdwr and on the 2nd Draft of the Issues Paper. The comments shall become part of the records of the rule-making proceeding and shall be considered in the finalization of the proposed rdwr,” erc Chairperson and CEO Agnes VST Devanadera said.
The second rdwr took into consideration earlier comments and concerns submitted by industry stakeholders on the first draft that was published in June 2019. Once finalized and promulgated, the revised rdwr will provide the framework for the erc’s evaluation of the private DUS’ revenue applications and ensure that the rates that will be charged to their customers are just and reasonable.
The erc will also tap technical consultants that will the agency in the review of the roll-forward of the regulatory Asset Base, capital expenditure and operational expenditure forecast, and regulatory Weighted Average Cost of Capital (WACC) for the 5th regulatory Period.
WACC is a measure of power utilities’ cost of capital. It is the return a firm must earn on existing assets to keep its stock price constant and satisfy its creditors and owners.
The erc will accept comments until April 12.
“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 said.