Recall of provisional power rate hike eyed

CEBU, Philippines – Despite the reduction of the provisional increase of power rates in the Visayas by the Energy Regulatory Commission, the Freedom from Debt Coalition has filed a motion to recall the provisional authority that ERC granted to the National Power Corporation (NPC) and Power Sector Assets and Liabilities Management Corporation (PSALM).

Under the provisional authority that ERC granted to NPC and PSALM last February 16, 2009, it allowed electricity rates to increase by P0.4682 per kWh, P1.1460 per kWh and P0.7147 per kWh in the Luzon, Visayas and Mindanao grids, respectively.

However, due to protests in Visayas and Mindanao and to official interventions made by local government units, consumer groups and FDC, the ERC modified its February 16 order and reduced by 30.84 centavos the provisional increase of P1.1460 per kWh in Visayas.

The reduction made by ERC was “taking into account the impact of the sale of NPC’s Panay and Bohol diesel power plants.”

In filing the motion, FDC legal counsel Renecio Espiritu Jr. contended that the 12 percent Return on Rate Base (RORB) is illegal as NPC’s allowable RORB under its own charter is only at 10 percent.

Espiritu also said that the provisional authority was issued despite insufficiency in evidence. According to FDC, ERC cited figures not found in the records and that the Joint Application is so deficient in substance that it merits outright dismissal.

Likewise, the group said the assumption that sales of electricity will decrease with the privatization of NPC power plants, thus resulting in the increase of rates due to the relatively higher costs for the remaining plants, is not supported by evidence.

Above all, FDC said that the provisional authority granted by ERC to NPC and PSALM violates due process. —Mitchelle L. Palaubsanon/WAB (THE FREEMAN)