The Energy Regulatory Commission (ERC) has instituted a systematized confirmation process for the true-up mechanisms and automatic cost adjustments being billed by distribution utilities to consumers.

In a resolution, the ERC mandates the DUs to submit reportorial requirements on cost recoveries passed on to consumers on the month immediately following the inclusion of such in the customers’ billings.

“The DU shall provide the ERC with all calculations and information relative to the adjustment mechanisms provided,” it said, noting that such shall be based on the uniform reportorial requirements along with supporting documents.

“The applications and supporting documents shall adopt the templates to be prescribed by the ERC,” the Rules said.

The confirmation process for cost recoveries, such as purchased power and those relating to currency exchange movements, will validate if the DUs have just been passing on prudent costs and to ensure that no over-charging have been committed against the consumers.

“The ERC finds it necessary to establish a systematized confirmation process that conforms to the due process requirement of the law for automatic cost adjustment and true-up mechanisms,” the regulator noted.

The automatic cost adjustments and true-up mechanism set as component in customers’ billings, include those of: generation charges; system loss charges; transmission rate adjustments; local franchise tax recovery mechanism and local business tax recovery mechanism; among others.