ERC urged to nix rate hike bid of Panay power firm

MANILA, Philippines - A consumer group in Iloilo has urged the power sector regulator to reject the rate hike petition of Panay Electric Co. (PECO).

The Freedom from Debt Coalition (FDC)-Iloilo said they have asked the Energy Regulatory Commission (ERC) to junk PECO’s application for annual revenue requirement and performance incentive scheme under the Performance Based-Regulation (PBR).

According to FDC, this application will drive the distribution charge higher as it will entail a minimum increase of 33 centavos per kilowatt-hour (kwh), or from 87 centavos to P1.20 per kwh.

“Increase in electricity charges is the last thing that consumers are expecting from PECO with its very poor performance and unjust and unauthorized charges,” said Ted Aldwin Ong, chairperson of FDC-Iloilo Chapter.

“What performance incentive PECO is applying for when it has the worst quality of service and known for its anti-consumer track record.”

He said what the consumers are demanding is the immediate reduction of rates in the midst of PECO’s daily brownouts and exorbitant rates considered among the highest in the world.  

The increase in the distribution charge will fall under a five-year regulatory period, or from October 2011 to 2015, under the rules for setting distribution wheeling rates implemented by ERC.

FDC said once approved by the ERC, PECO will start collecting distribution charge in order to construct a new office building amounting to P110-million in its old Gen. Luna Plant and a new power substation amounting to P170 million in its property along Diversion Road.

The power utility will also buy new vehicles for their executive officers amounting to P5 million; new office facilities and equipment like computers, chairs and tables; concrete poles and distribution transformers, and will hire new office personnel.

However, FDC revealed that PECO will not provide new financial investment from its profits to cover the cost of its development plan and will instead collect from consumers through the distribution charge.

“With PECO as a good example, we were on the right track to resist privatization of the country’s power sector, as such, we continue with our demand to take-over this private power firm and convert it into a cooperative,” Ong said.