119 power co-ops poised to cut rates in Feb. 2003

The Association of Philippine Electric Cooperatives (APEC Party List) said yesterday the power rates of the country’s 119 electric cooperatives would likely be reduced starting February next year by about 20 centavos to P1.50 per kilowatthour if the Energy Regulatory Commission (ERC) would approve their applications for rate reduction.

The power rate reduction was brought about by the condonation of rural electrification loans under the Electric Power Industry Reform Act (EPIRA).

APEC Rep. Ernesto Pablo said the decrease in rates of ECs varies depending on the performance of the small power utilities.

Pablo said he is urging all the ECs to file their petition for rate reduction with the ERC before the end of the year. "Let this be the Christmas gift of APEC and the Arroyo administration to the six million poor rural households served by ECs," he said.

"The condonation will now be fast-tracked courtesy of the directive of the President not to further delay the reduction in power rates. There is also an agreement between APEC, ERC and the National Electrification Administration (NEA) to simplify the requirements for debt condonation and rectify the formula for rate reduction," Pablo added.

The APEC officials said he expects ECs to file jointly on a regional basis their petitions for rate reduction so as to immediately bring about rate reduction. Two weeks after the filing, ERC will provide a provisional authority to allowing a cooperative to lower its rates accordingly.

Meanwhile, the ERC is expected to approve within the month the applications for unbundling of rates of one distribution utility (DU) and four electric cooperatives (ECs).

"We are hoping that we could finish it before the week ends. But we are targeting that if we cannot make it this week, at least release these orders within this month," said ERC acting chairman Leticia Ibay.

She said the commission would try to issue a decision on Visayas Electric Co. (VECO), the largest DU in the Visayan region.

Energy Secretary Vincent S. Perez said the decision on VECO would be crucial as this will set a precedent on other decisions that the ERC would issue.

The application of the Manila Electric Co. (Meralco) remains pending with the ERC as it still has to go through a series of public hearing until January next year.

Ibay said they have encountered delays in the release of the five other decisions because some of the ECs that were granted approval for their unbundling rate applications have filed motion for reconsideration. "Some of them have filed a motion for us to reconsider our decision for their unbundling rate," she said.

According to Ibay, they are currently studying these earlier decisions to see if they would change their orders or not. "We are looking into these motions. We have to study it carefully," he said.

She said the ECs were questioning the decision of the ERC on removing in he calculation of their return-on-rate-based (RORB) some portions of the maintenance expenses. "They argued that this will affect their future rate increase applications," she said. But the ERC chief noted that these expenses, as viewed by the commission, will not benefit consumers.