MCPC to file for rate reduction
Here’s a touch of cool rain for consumers scorched from paying rising electric bills.
The Energy Regulatory Commission has urged consumers who perceive them to be burdened with overpriced electricity to file for rate reduction with the commission.
Mt Apo Geothermal 1 & 2’s power rates to DUs rose from less than P3 to P5.40 after a meter transfer of ownership of its output (photo courtesy of EDC)
During the ERC’s Continuing Regulatory Education for the Stakeholders (CREST) for Mindanao journalists held last April 7 in General Santos City, the issue of overpriced electricity was raised on the floor by some journalists.
“Consumers may file with the ERC for adjustments of rates that they think are no longer reasonable and just for the consumers to pay,” said Atty. Floresinda G. Baldo- Digal, ERC Spokesperson and Director, Regulatory Operations Service responsible for enforcing the rules, regulations, standards and methodologies adopted by the Commission.
Interaction between media & ERC Spokesperson Atty Floresidna G. Baldo-Digal during ERC CREST in General Santos City. (photo by Mike Banos, NPN)
The ROS develops recommendations with supporting studies and documentations in all pending matters before the Commission including rates, tariffs performance standards, universal service charge, stranded costs, system losses, cross subsidies and other matters as may be directed by the CEO.
Baldo-Digal related how in the whole history of the ERC only one case was ever filed by a consumer group against a distribution utility which was filed by Mr. Pete Iligan of NASECOR against a certain distribution utility which prospered and resulted in an adjustment.
With this development, the power advocacy group Mindanao Coalition of Power Consumers (MCPC) will file petitions for rate reductions against electric cooperatives and private distribution utilities in Mindanao which are allegedly did not carry out the ERC mandated least cost acquisition process in the EPIRA.
FDC Misamis Corp. Coal Fired Power Plant under construction at the Phividec Industrial Estate, Villanueva, Misamis Oriental. (photo courtesy of EDC)
“The LCA process is required under the Electric Power Industry Reform Act (EPIRA) of 2001, and this provision in the law resulted in the Energy Regulatory Commission passing in November 2015 their Resolution No. 13, Series of 2015, entitled “A Resolution Directing All Distribution Utilities (DUs) to Conduct a Competitive Selection Process (CSP) in the Procurement of Their Supply to the Captive Market”, said Engr. David A. Tauli, MCPC president.
Specifically, the MCPC aims to contest the provisionary rates granted by ERC to the distribution utilities (DUs) who entered into power supply contracts with FDC-Misamis for power sourced from Mt. Apo Geothermal plants when its power output was privatized through the Independent Power Producer Administrator (IPPA) process resulting in a quantum jump in power rates from less than PhP 3.00 per KwH under PSALM-NPC to PhP5.40 when FDC-Misamis won the IPPA bidding.
It would also contest the contracts entered into by the same genco with over a dozen Mindanao-based DUs.
ERC Commissioner Atty. Gloria Victoria C. Yap-Taruc interacts with journalists during the recent ERC CREST held in General Santos City. (photo by Mike Banos, NPN)
“The contracts with FDC-Misamis were entered into when other coal power plants were offering power supply at prices ranging from 4.00 to 5.00 pesos per kWh. For example, the EC members of the PSAGCOR were able to contract for power supply from the proposed GTN coal power plant in Kauswagan, Lanao del Norte, at an effective rate of less than 4.00 pesos per kWh when the coal plant starts operation in 2017,” Tauli explained.
“The contracts with the FDC-Misamis coal plant will result in the consumers of the electric cooperatives paying an extra 1.40 pesos per kWh starting in the first half of 2017, as compared with the likely price that could have been obtained if an LCA process was done. This means that consumers would pay approximately 4.20 billion pesos more every year as a result of the negotiated contracts. This would amount to over 100 billion pesos in windfall profits over the 25 years operation of the coal plant,” he added.
In his talk during the same ERC CREST activity, ERC Chair Jose Vicente B. Salazar stressed the need for the commission to get real time feedback from consumers to properly carry out its mandate when told DUs only hold a token initial hearing in their franchise area for ERC cases, and the rest at the ERC offices in Metro Manila, which consumer groups cannot afford.
Energy Regulatory Commission Chairman Atty Jose Vecente Salazar. (photo by Mike Banos, NPN)
“What you mentioned is just the minimum requirement,” Salazar said. “Kindly write to us so we can accommodate your request so we can act on it. We want as much as possible to elicit these feedback coming from the consumers and be assured the hearings will be held where the consumers can have their say without any kind of constraints or otherwise.”
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