Analysis on the performance incentive scheme for privately owned distribution utilities done by ERC, Philippines

Date

6-2016

Degree

Bachelor of Science in Electrical Engineering

Major Course

Major in Power Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Adviser/Committee Chair

Khristel Mae V. Villasin

Abstract

In a regulated environment where the distribution utility's revenue is capped, incentives are being used to avoid deterioration of service performance. Energy Regulatory Commission (ERC) designed an incentive and penalty framework named as the Performance Incentives Scheme (PIS) under the rate setting methodology. This study analyzes PIS and the manner of assessment in terms of its three main parts, the Price-linked incentive scheme, Guaranteed Service Level Scheme (GSL) and Information disclosure. A sample assessment of a privately-owned utility, specifically an assessment on Cagayan de Oro Electric Power & Light Company, Inc (CEPALCO) under PIS was made. Based on the assessment of CEPALCO's performance, it receives a financial reward of Php 0.0049/kWh for the Price-linked incentive scheme which will be added to the utility's Maximum Average Price (MAP) that it charges to its customer. Also, CEPALCO materially benefitted on the Guaranteed Service Level (GSL) since only one GSL index has been violated. For the Information disclosure, CEPALCO has submitted all pertinent data which can be used for future analysis. It has been recognized and concluded that utilities has the option to maintain or improve its performance and be rewarded financially or it can shoulder the penalty and compensation for its worst-served customers.

Language

English

Location

UPLB College of Engineering and Agro-Industrial Technology (CEAT)

Call Number

LG 993 2016 E64 R47

Document Type

Thesis

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