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Sunday, August 13, 2006
Power rate reduction hails, transparency a must
A CONSUMER advocacy group called on the Energy Regulatory Commission (ERC) for more transparency in the monthly billing of electricity as it welcomed the reduction in the generation charge of electricity as a result of the operation of the wholesale electricity spot market (WESM).
"Transparency will allow the consumers to know where the reduction will come from -- whether from the independent power producers (IPPs) of distribution utilities (DUs) like the First Gas Power Corp of the Lopezes or from the WESM," Pete Ilagan, president of the National Association of Electricity Consumers for Reforms (Nasecore), said.
Nasecore proposes that the respective prices of electricity coming from bilateral contracts of the IPPs of DUs and those from WESM should appear in the monthly bills of consumers. This way, consumers can appreciate better the reforms implemented in the electricity industry if they are made to know which is selling lower electricity.
This will also force the distribution utility to comply with its obligation of sourcing the cheapest electricity that it will supply to its captive market as mandated under the Electric Power Industry Reform Act (EPIRA).
Meanwhile, in reaction to Albay Representative Joey Salceda's statement that the price of the electricity sold in the WESM was in effect being subsidized by the state, Nasecore proposes that the government stop the sale of the assets of National Power Corporation (NPC) to foreign and local investors.
Instead, the government should convert NPC into a consumer-owned and controlled cooperative in order to recognize the consumer payments of the notorious PPA "power purchase agreements" as their equity.
He explains that since the government has only infused 5% equity in NPC and the remaining 95 percent comes from loans which the consumers are dutifully paying every month through the payment of rates, it is only fair and just that consumers be given a rightful share in the assets of NPC.
"Come to think of it, consumers have already partly or mostly paid the assets of NPC that are up for privatization. But in selling these assets the government will get to keep the proceeds and the consumers nothing," Ilagan pointed out.
And when these assets are sold to private investors they will naturally recover their investments from the consumers who have no other choice but to pay it through the power rates.
"This is very painful for the consumers if they will not receive a just share of the NPC privatization especially so that they are the ones who have been paying these loans for many years now," Ilagan said. (Press release)
(August 12, 2006 issue)
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