Wednesday, September 01, 2004 Oro firms facing near P10 rate hike By Lizanilla J. Amarga
* PCCI-Mindanao warns increase would close businesses, kill new ones
* Traders, Oro dad question computations on bills and new Rate of Return base
SHOULD the National Power Corporation (Napocor) proposed power rate increase be approved, industries and other huge commercial power users here would be facing a power rate charge of almost P10/kwh.
There are also apprehensions raised that this P10/kwh for industries would even go up as this is subject to oil prices, foreign exchange fluctuations and perhaps even additional increases in transmission, metering and other charges by electric power distributors.
Philippine Chamber of Commerce and Industry (PCCI) governor for Mindanao Arsenio Sebastian said local industries and huge commercial power users would be folding should the Energy and Regulatory Commission (ERC) approve Napocor's petition.
This as he revealed that they have gathered information that the power consumption and charges of these huge power consumers are computed differently by the Cagayan de Oro Power and Light Company, Inc. (Cepalco) as reflected in their bills.
He said these huge power consumers that include those major industries, malls and other big commercial entities are being charged at the rate of P6/kwh to P8.45/kwh.
"The highest rate we gathered was that of an industry here in Cagayan de Oro being charged with around P8.45/kwh and if Napocor's petition for a P3.15/kwh rate is approved, then this would go up to almost P10/kwh," he said.
Sebastian said this P3.15/kwh generation rate, if approved, could even go up as Napocor is allowed to automatically charge the Generation Rate Adjustment Mechanism (GRAM), foreign exchange fluctuations and other market forces.
Not viable
He said this as there might also be some increases as to transmission, metering and other charges that power distributors like Cepalco might also petition for.
"This is why we are complaining and initiating moves to block this increase," he added.
Sebastian raised these apprehensions during the public hearing with ERC and Napocor last Thursday held at National Economic and Development Authority (Neda) 10 conference hall.
There he told ERC chairman Rodolfo Albano and Napocor representatives that this proposed Napocor generation rate would mean charging P10/kwh for some industries here.
It would mean the death of several already struggling local industries.
"This is over 100 percent increase in our power rates. It would no longer be viable for our industries here in Mindanao...our companies would be closing down," he said.
Earlier Edgar Pagaling, a representative of the Lanao Power Consumers Federation (Lapocof) said the proposed power rate increase would prevent any expansion of business in any part of Mindanao and impose heavy burdens on Mindanaoans.
And in an interview Councilor Jose Benjamin Benaldo said the newly formed multi-sectoral Mindanao bloc is questioning the Napocor proposal for a rate of return base (RORB) saying the mechanisms for such a scheme had yet to be laid out.
"This RORB can be likened to the lifeline rates scheme proposed by the power distributors because it outlines the peak hours of consumption and the corresponding costs. The problem is this would mean new facilities and new meters and so this would take time," he said.
The councilor also said there is a need for the Napocor to first conduct an appraisal of its power plants first before imposing a power rate increase.
"The rate increase should be the last resort and we should exhaust all efforts like determining if the Napocor does its share of cutting down on costs and repairing its plants," he said. (with a report from Stephen Capillas)
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