PB asks ERC not to act on power rate hike petitions

CEBU, Philippines - The Cebu Provincial Board has passed a resolution requesting the Energy Regulatory Commission through the Department of Energy not to act on petitions for power rate adjustments resulting to power rate hikes but rather seek ways and means to reduce power costs.

In a resolution principally authored by Cebu Sixth District PB member Thadeo Ouano, it stated that another power rate adjustment will have a negative impact on the cost of production of industrial players and purchasing power of the consumers, especially the middle and low income groups.

“Nagsige na man lang ta ani og pasaka sa kuryente. Dapat unta ang ERC mangita na sila og pamaagi nga dili magsige og saka ang presyo sa atong kuryente kay daku kini og epekto sa atong katawhan, ilabi na ngadto sa mga pobre, (The ERC should find ways to stop these power rate hikes because this has a big effect on the people especially the poor.)” Ouano said.

The Visayan Electric Company Inc. is set to increase its power rate after ERC approved the petition of the National Power Corporation and the Power Sector Assets and Liabilities Management Corporation.

The ERC on March 26, 2012 approved Napocor and PSALM to recover, under the Generation Rate Adjustment Mechanism and Incremental Currency Exchange Rate Adjustment, the incremental fuel and purchased power costs and foreign exchange costs incurred during the period of January 2007 up to April 2010.

As a result of such approval, power rates in the Visayas will again go up by 0.6060/kwh.

But VECO assured that the increase in their generation charge would be much lower than 0.6060/kwh as they are only sourcing 30 percent of their power needs from Napocor.

The exact amount of VECO’s increase to their power consumers will be made known within the week, as the price adjustment will be reflected on the consumer’s electric bill on May 10.

Aside from the .60 centavo increase for Visayas under GRAM, Napocor and PSALM still have pending rate hike applications before the ERC for the recovery of stranded debts and stranded contract costs.

The resolution added that any increase in the cost of electricity will create a chain of demands for increases in the cost of consumer items, salaries and wages.

“Lower cost of electricity would generate more interest in commercial and industrial activities and other SMEs which in return, will create more job opportunities and income generation, thus, adding more dynamism to the economy,” Ouano said.

The resolution further stated that DOE needs to formulate a program that could generate more effective competition in the industry in order to achieve a comfortable level of power supply cost, and among others, a set of incentives that could attract investment in the power sector.—(FREEMAN)