Thursday, August 12, 2004 Households pay P.31 per kwh more By Libery A. Pinili & Jessica B. Natad Sun.Star Staff Reporters
CONSUMERS can expect an increase of around 31 centavos per kilowatt-hour (kwh) in their bill from the Visayan Electric Co. Inc. (Veco) starting this month.
If a household consumes 100 kwh in a month, its bill will increase by about P31, listed as part of the power cost adjustment (PCA).
This will take effect when Veco passes on the new cost of power it is buying from the Cebu Private Power Corp. (CPPC).
Veco public information officer Ethel Taneo-Natera said that even if the Energy Regulatory Commission (ERC) has yet to decide on Veco’s petition for unbundled power rates, the firm can still pass on the new cost using the PCA formula.
Natera said CPPC started billing Veco based on the new pricing scheme last July 25, for electricity Veco bought from June 26 to July 25, 2004.
The ERC granted CPPC the provisional authority to implement the pricing scheme in the interim agreement between the power supplier and Veco.
Bear it
The pricing scheme increases the cost of power CPPC is selling to Veco by P1.0948 per kwh.
“We have to bear with the increase because we don’t have a choice,” said Cebu Chamber of Commerce and Industry (CCCI) president Robert Go.
ERC granted CPPC, which supplies around 25 percent (or 62 megawatts daily) of the power being distributed by Veco, the authority to implement the increase.
This will allow the independent power producer to recover the cost of generating electricity.
CPPC general manager Rogelio Lim said that if they are not allowed to implement the new price, they will have to cease operations by September.
“We are not even asking for an increase in the power rate but just a formula pricing that will help us recover costs,” he said during a presentation to the Cebu Investment Promotions Center yesterday.
CPPC has said it has been suffering financial losses amounting to several millions of pesos since 1992, when the power purchase adjustment was capped at 40 centavos per kwh.
True cost
The cap prevented CPPC from recovering the true cost of generating electricity.
Go said that if CPPC will continue to incur losses and shut down, investors would not come to Cebu.
The ERC earlier said Veco cannot yet pass on the increase to consumers until the commission approves the distributor’s petition for unbundling and, subsequently, its use of the generation rate adjustment mechanism (Gram).
ERC Chairman Rodolfo Albano had said it would take three months, from the time the commission issues a decision on the rate unbundling petition, for Veco for seek approval for Gram.
The unbundling of rates is the breaking down of specific components of the electricity bill, to make the cost of power more transparent and understandable to consumers.
Gram, on the other hand, is a mechanism that allows power distributing firms, like Veco, to recover fuel expenses and cost of power from independent power producers like CPPC.
Natera said once ERC issues a decision on Veco’s petition for unbundling of rates, the power distributor will stop using the PCA, and abide by the guidelines of the commission. JBN/LAP
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