Visayan Electric consumers urge ERC to explain expensive rates

·4 min read

VISAYAN Electric Company consumers have urged anew the Energy Regulatory Commission (ERC) to explain the alleged questionable charges and the company’s expensive electricity rates in the billings.

Consumers, along with the Philippine Movement for Climate Justice (PMCJ) and other stakeholders of Visayan Electric, made the appeal during the public symposium dubbed “Why Electricity Rates in Cebu City are Expensive?” at the University of Visayas’ main campus in downtown Cebu City on Saturday, May 28, 2022.

City Councilor and Minority Floor Leader Nestor Archival, one of the speakers during the symposium, said he had been asking the ERC to explain to consumers why the electricity rates in Cebu are expensive.

He said the ERC made an appearance before the City Council via Zoom a month ago, in which he questioned the 21 charges listed on the consumers’ billings. But there was not enough time for a thorough discussion.

“We keep asking because we don’t have any means of asking them to lower [the rates] but we keep asking [them] so they will understand that the people have been suffering too much,” he said in a mix of Cebuano and English.

When asked if the City Council had also invited Visayan Electric to explain, Archival said the company merely said it only followed the law.

“My point is the ERC was the one that approved the [charges]. So every time they are going to submit the billings or charges, and everything they will implement, they will submit it to the ERC,” Archival said, adding they have no idea as to how long ERC will review or approve the changes.

But Archival, an electrical engineer for about 40 years, said the ERC cannot feel the ordinary consumers’ burden.

“That’s why we are all, for me, under the mercy of the utility [Visayan Electric] because the ERC is the one that conducts the review,” he said, stressing he will support the consumers should they file a petition to review the charges.

Epira Law

Archival said there is also a need to amend some parts of the Electric Power Industry Reforms Act of 2001 (Epira Law or Republic Act 9136), citing Section 45B is silent on the need for competitive bidding for power supply contracts.

The “no cross ownership” concept under the law was also not materialized as it allowed the bilateral contracts between generator and distribution utilities that are related parties or sister companies.

PMCJ co-chairman and lawyer Aaron Pedroza said Visayan Electric sources more than 50 percent of its total power demand from affiliated generation companies, which is a violation of the Epira law since it prohibits them from sourcing above the said percentage.

Pedroza said they want to challenge the overcharges and illegal charges of the Visayan Electric by writing to ERC.

“For a very long time, it has been treated as something technical but one can experience the high power rate. It has gotten to a point that is already brazen,” said Pedroza, citing the “illegal collections” of capital recovery fees by Visayan Electric for the operation of its power generator — the Cebu Private Power Corp. (CPPC) from 2013 to 2021 despite having no power supply agreement (PSA).

He said the PSA between distribution utility and CPPC already expired in 2013 or met its natural demise by virtue of the expiration of the 15-year term since it entered into an agreement in 1997.

The CPPC power plant was constructed by East Asia Diesel Power Corp. for Visayan Electric under a build-operate-transfer scheme for a 15-year cooperation period which ended in November 2013.

In a previous report, Visayan Electric entered into a new supply contract with CPPC for another 10 years, which was approved by ERC.

The power distributor, however, discontinued the contract of CPPC in August 2021 after noting its rate as the most expensive among all of its power suppliers.

Raul Lucero, Visayan Electric president and chief operating officer, earlier said they turned to the Wholesale Electricity Spot Market to source power although its rates are changing hourly.

Pedroza, who is also the secretary general of Sanlakas, said they have to be held accountable to that apart from ongoing sourcing of Visayan Electric of power supply in its own sister companies.

Challenge

He further said the challenge is not just for the consumers but also for the local government units inside the Visayan Electric franchise area including the cities of Cebu, Mandaue, Talisay, Naga and four municipalities of Liloan, Consolacion, Minglanilla and San Fernando.

Pedroza said the first of business or agenda of the newly elected or reelected public officials should include looking into how the electricity rates would not increase amid the increase in the prices of goods and economic crisis brought about by the Covid-19 pandemic.

Once this will be solved, he said the alleged illegal collections due to the CPPC-Visayan Electric arrangement amounting to P7.2 billion would be returned or refunded since 2013.

Pedroza said the bigger step is engaging ERC, Visayan Electric and other stakeholders in the community in order for them to realize that they can no longer take these issues sitting down.

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