30¢ power rate cut to start August

The 30-centavo-per-kilowatt hour power reduction rate as provided for under the Electric Power Industry Reform Act or Republic Act 9136 will be implemed starting Aug. 26, the newly-created Energy Regulatory Commission (ERC) announced yesterday.

Acting ERC Chairman Melinda Ocampo said the end-users in Metro Manila will be able to see in their billings the said 30-centavo reduction by August, at the latest.

Based on Resolution No. 2001-04 which was signed yesterday by the five-man board of the ERC, the National Power Corp. will reduce its power rates to power distributors effective yesterday.

The power rate reduction, in turn, will be reflected in the billing of the Manila Electric Co. (Meralco), one of the biggest customers of Napocor, by August. Some power utility firms, Ocampo said, may not be able to implement the reduction at the same time as Meralco since they have varying billing procedures.

Ocampo said the reduction will be implemented indefinitely since the law does not indicate up to when it will be imposed.

However, there is also a provision in the law that allows the Napocor and the power distribution utilities to recover their losses one year after the implementation of the measure.

The resolution further states that the 30-centavo rate reduction will apply in full only to Napocor customers. Other power distribution firms not sourcing their entire power supply from Napocor will be entitled to the amount "proportionate to the Napocor’s contribution to their power supply requirements.

Power distribution firms that refuse to implement the reduction will be slapped with a fine ranging from P50,000 to a maximum of P50 million. The penalty also includes a prison term.

The ERC was officially created only yesterday taking over the functions of the Energy Regulatory Board (ERB) which ceased to exist as of yesterday.

Since President Arroyo has yet to appoint members of the five-man quasi-judicial and quasi-legislative body, members of the ERB board are staying on in a holdover capacity.

The holdover board members are Ocampo (chairman) and four commissioners: Alberto Dosayla, Oscar Ala, Nicomedes Deynata and Marietta Larracas.

Endowed with judicial powers, the ERC can issue cease and desist orders and cancel licenses of generation companies and transmission firms. ERC is also mandated to set up performance standards and financial capability standards of the National Transmission Co. (Transco) and other distribution utilities and suppliers.