Hearings on pending power rate hikes sought

MANILA (Updated 12:39 p.m.) -- Senator Ralph Recto wants the Senate to check on separate applications pending at the Energy Regulation Commission (ERC) that he said could have leave consumers paying P5 more per kilowatt-hour (kwh).

The Power Sector Assets and Liabilities Management Corp. (Psalm), National Power Corp (Napocor), Manila Electric Co. (Meralco) and the National Grid Corp of the Philippines (NGCP) have petitioned the ERC to allow them to raise power rates.

Psalm, which has oversight on the privatization of state power assets, is asking the ERC to let it raise rates in Luzon by P0.1059 per kwh and in Visayas by P0.1157 per kwh, as well as a P0.39 per kwh increase in the Universal Charge to pay off Napocor's debts.

Of the P0.39 per kwh increase, P0.03 will be used to pay off debts while P0.36 will pay for stranded contract costs, or "the excess of the contracted cost of electricity over the actual selling price," Recto said.

Psalm also wants to further increase power rates by P4.72 per kwh in Luzon, P4.26 per kwh in the Visayas, and P3.17 per kwh in Mindanao under the Generation Rate Adjustment Mechanism (Gram) and Incremental Currency Exchange Rate Adjustment (Icera).

Gram covers the cost of fuel and electricity from private power producers, while Icera is meant to cushion Napocor from foreign exchange fluctuations.

Meralco already increased its generation charge in August by P0.08 per kwh and has already been allowed to raise rates by P0.03 per kwh to recoup P944 million in under-recoveries from January to February 2010.

The NGCP, meanwhile, has proposed an increase of P0.82 per kwh in Luzon to pay for P80 million it spent to repair typhoon damage to power lines last year.

Meralco, for its part, has increased its generation charge effective on the August 2011 billing period at P0.08 per kilowatt-hour as a result of higher cost of power from the spot market and power producers.

The same power retailer just got an approval from the ERC to impose another P3.06/kwh for its under-recoveries during the period of January 26 to February 25 in 2010 amounting to P944 million.

“If these petitions fall through, every power user would be bracing for multiple power rate whammies where the future electricity billing would display a jump of at least P5 for every kilowatt-hour used,” Recto said.

He said rising power costs is counter to the intent of the Electric Power Industry Reform Act (Epira), which promised cheaper, and reliable power. (Jonathan de Santos/Sunnex)