The Energy Regulatory Commission (ERC) announced yesterday that it had ordered the state-owned National Power Corp. to reduce its rates by as much as 31.5 centavos per kilowatt hour, more than a month into the campaign for the senatorial elections.

Consumers -- whether residential, commercial or industrial -- in the Visayas will benefit from the largest rate cut of 31.5 centavos while those in Luzon and Mindanao will have 4.3 centavos and 4.5 centavos reductions, respectively.

ERC Chair Rodolfo Albano said in a statement the new rates would be reflected in Napocor customers' bills starting the billing period from February 26 to March 25.

The same reductions would be passed on to end-users' bills but officials of Manila Electric Co. -- Napocor's biggest customer -- said it would take much longer for end-consumers to feel the effects of rate changes.

The officials said Meralco used to automatically implement corresponding rate changes when Napocor adjusted its own, as was the practice among distributors and electric cooperatives.

But a Supreme Court decision issued in September 2006 disallowed this and required the distributors and cooperatives to seek approval first from the ERC.

The decision stemmed from consumer groups' complaints that Meralco was increasing rates without due public hearings and without permission from the regulator.

According to Meralco, the 4.3-centavo reduction would mean a P4.30 decrease in the monthly bill of a household that uses 100 kWh.

But this would not happen until the company has filed the necessary petition, which officials said was now piling up since the high court's September decision.

Albano said the reductions were arrived at after a careful and thorough evaluation of Napocor's petitions.

The ERC chair was referring to two separate applications the Napocor filed last November 27 seeking permission to adjust effective rates --the basic rate plus the costs related to fluctuations in the currency exchange rates and in the cost of fuel and electricity generation.

In industry parlance, the added costs are called the Incremental Currency Exchange Rate Adjustment (Icera) and the Generation Rate Adjustment Mechanism (Gram).

In its filings, Napocor was asking to be allowed to implement Icera and Gram to recover costs incurred from November 2006 to January 2006.

In the new decisions dated Feb. 7, ERC said Napocor was allowed Icera of 74.25 centavos a kWh in Luzon; 16.79 centavos in the Visayas; and 3.04 centavos in Mindanao.

The regulator also allowed Napocor generation rate changes of 20.34 centavos in Luzon; 1.57 centavos in the Visayas; and 45.44 centavos in Mindanao.

ERC Commissioner Rauf A. Tan said in a telephone interview the resulting reduction was due to difference between the new Icera and Gram and the previous ones, which had been effective since August 2006.

"The practice is that the new figures replace the old numbers while the basic rate remains the same," Tan explained. "The basic rate can change through a separate process of seeking approval with the ERC."

Albano said the public had been expecting reduction in rates as the peso value got better.

"However, the (Feb. 7 decisions) do not reflect yet said improvement for it covers earlier billing periods," Albano added.

Pete Ilagan, president of the National Association of Electricity Consumers for Reforms, said the public had yet to benefit from the noble intentions of the Electric Power Industry Reform Act of 2001.

"These rate adjustments are what is expected because they are the result of differences in what Napocor charged its customers and what electricity actually cost," Ilagan said. "When will we feel lowering of power costs that are actually the effects of industry reforms?"