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Wednesday, March 15, 2006
Councilor tells Cepalco: Cut down power rates
By Danilo V. Adorador III
* Councilor says power utility should emulate Meralco move
* However, Benaldo cites interests as hindrance to rate reduction
COUNCILOR Jose Benjamin Benaldo challenged local electric utility Cepalco on Tuesday to follow Meralco's recent decision to cut electric rates, but quickly conceded that his dare may fall on deaf ears.
Meralco, the largest power utility firm in the country servicing National Capital Region and other parts of Luzon, announced this week it is cutting rates by as much as 8.23 centavos per kilowatt-hour (kwh).
The company said the decision was reached because of the excellent distribution performance of its independent power producers (IPPs).
Unlike Meralco, which sources its power from different distribution utilities, Cepalco, the councilor said, gets the bulk of its supplies from Minergy which the power firm admitted to being a part owner.
Under the present semi-monopoly power distribution scheme in Cepalco, Benaldo, who heads the City Council energy committee, said it would be an uphill scenario for the firm to voluntarily reduce rates as Meralco did.
"This is why a law should be passed prohibiting distribution utilities from owning stakes in power producing firms," the councilor said.
"There is a conflict of interest under Minergy and Cepalco's present set-up so I think voluntary cutting of rates is just another dream."
Meanwhile, he said the Mindanao Power Block will continue to oppose the proposed rate adjustment filed by the National Transmission Corporation (TransCo) which is due for Energy Regulatory Commission's decision this May.
In the group's position paper, Benaldo said their opposition gave much emphasis on TransCo's dollar-exchange rate forecast-one of the basis cited by the transmission company in asking for rate increase for its second regulatory reset beginning this year.
This is underlined by the fact, he said, that the current peso-dollar exchange is much lower than the previous estimate of TransCo.
TransCo purchase some its materials and services from foreign firms.
(March 15, 2006 issue)
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