Tuesday, January 30, 2007 Council seeks Cepalco refund By Danilo V. Adorador III
CITING the country's strong currency, Cagayan de Oro councilors want the city's power utility to refund its customers an unspecified amount from currency adjustment rates it may have overcharged last year.
Cagayan Electric Power and Light Company (Cepalco) vice president Jose Edgardo Uy, however, assured that no excess charges were made on currency adjustment rates last year, adding the firm welcomes any inquiry from the City Council.
The City Council, in a resolution passed Monday, also demanded Cepalco to explain why it has continued imposing the additional currency adjustment rates on four successive months last year when the peso had begun appreciating against the dollar.
They also want to know why Cepalco had not returned the supposedly excess charges, contrary to the Luzon-based Meralco's action to refund its customers this month due to the continued appreciation of the peso against the dollar.
But Uy assailed this, saying there was no reason to effect a refund similar to that of Meralco since the situation between the two power firms was different. He did not elaborate.
In a separate resolution, they also asked the Energy Regulatory (ERC) to strictly regulate the Currency Exchange Rate Adjustment (Cera)--one of the cost recovery mechanisms in which utilities can charge customers for every upward or downward change in the present exchange rates.
Councilors Jose Benjamin Benaldo and Edgar Cabanlas, who both rendered respective special reports on the matter, shared what they said was a growing public perception that a strong peso had done nothing to lower electric rates.
Examining his own electric bills from June, July, and September last year, Benaldo said the Cepalco had imposed during these months Cera charges of P19, P23, and P24, respectively.
At this period, the councilor noted the peso had started its upward trend, reaching to an average rate of P50.4001 to $1 in September from P53.157 to $1 in June.
While Cera can be imposed anytime by distribution utilities -- per their own assessment of real-time currency adjustments -- Benaldo said a consumer safeguard should also be in place whereby excess Cera charges can be returned automatically without the usual arm-twisting between consumer groups and power firms.
This argument was contained in a separate resolution, in which the City Council asked the ERC to strictly regulate Cera.
In the Department of Energy website, it was explained that this cost-recovery system acts as a shock absorber for any increase in maintenance expenses and foreign debt principal payments due to changes in the peso-dollar exchange rate.
But Councilor Alvin Calingin believes this type of cost recovery mechanism has been abused by power utilities, and called on ERC to put more teeth on the process of consumer refund once found out that Cera was wrongly charged.
The City Council has summoned Cepalco officials in an inquiry over the matter next Monday.
