Cebuanos question power rate hike

CEBU CITY -- Several groups and individuals questioned the approval of a power rate increase that Metro Cebu's consumers will start to bear this month.

Cebu Chamber of Commerce and Industry (CCI) president Prudencio Gesta said any increase in power rates directly affects the operating expenses of businesses, which may pass on the added cost to households that already have to pay higher bills.

Government should review and find out why power in the Philippines is the most expensive in Asia, said Gesta in a text message.

When asked to comment, Atty. Joel Bontuyan, the Visayas director of the Energy Regulatory Commission (ERC), said the increase is reasonable and is intended to recover the National Power Corp.'s (NPC) losses due to costlier fuel.

June bills

The ERC also conducted hearings before approving the increase because the Supreme Court has banned automatic recovery of losses, he explained.

Customers of the Visayan Electric Company (Veco) will see the increase in their bill this month. It amounts to around P200 more for a household that currently pays P2,000 a month.

In a press statement this week, Veco cited two reasons for the increase.

First is the ERC's approval of an increase in the rate that the National Power Corp. (NPC) and the Power Sector Assets and Liability Management (Psalm) Corp. charges power distributors like Veco. The increase, pegged at 60.60 centavos per kilowatt hour in the Visayas, will cover the cost of fuel and foreign currency fluctuations.

The second reason is the increase in the Wholesale Electricity Spot Market's (WESM) purchase price. Its price went up by 51 centavos to P9.9578 per kwh for May.

Veco relies on NPC for about one-third of its total power supply.

Subsidies

As to the issue that the Philippines has one of the highest power rates in Asia, Bontuyan said that Indonesia indeed has lower power rates, but only because power costs are subsidized by the government.

The Philippines, in contrast, reflects the true cost of electricity.

Interviewed separately, businessman Robert Go, past president of the CCCI, said high power rates have driven investors from Cebu to Thailand, China, Indonesia and Vietnam.

The business sector, he said, wants to know what happened to the petition of a group to hold any increase now that the prices of petroleum are dropping.

He said there are other ways to prevent power rate increase, like requesting the Bureau of Customs (BOC) to waive the collection of duties and taxes on imported coal used by coal-fired power plants, on condition that these keep their power rates low.

Vic Sapio, president of the Consumers' Rights and Economic Welfare (Crew) Inc., said the power rate increase will hurt poor consumers the most.

Aaron Pedrosa, secretary general of Freedom from Debt Coalition (FDC) Cebu, said the cost of doing business is socialized while big-time businesses in power generation, transmission and distribution rake in assured profits.

"Even as power rates soar, service, access and supply remain the same," Pedrosa said.

Epira target

He said the increase is "continuing proof of the failure of Epira to bring down power costs. It is high time to review, repeal and replace it."

Proposals to amend the Electric Power Industry Reform Act of 2001 or Republic Act 9136 have been under consideration for years.

Among the proposals is to allow open access and retail competition once 50 percent of generation plants in the Visayas and Luzon are privatized, instead of the original threshold of 70 percent.

Setting up the WESM and unbundling transmission and distribution charges were also among the conditions before open access can be implemented.

Emmanuel delos Santos Rabacal, chair of the Infrastructure Development Committee of the Regional Development Council, said that in their last two meetings, including the one last June 13, they took up the proposed amendments.

However, Rabacal said the discussion focused only on Sections 38 and 39, which provides for the composition of the ERC and its compensation. (EOB of Sun.Star Cebu)