Sunday, August 15, 2004 Consumers not helpless against power supplier’s rate hike: ERC By Libery A. Pinili Sun.Star Staff Reporter
THE Visayan Electric Co. (Veco) should clarify with the Energy Regulatory Commission (ERC) if it is allowed to pass on the additional cost of power from one of its power suppliers this month.
ERC Visayas officer-in-charge Joel Bontuyan clarified a report that the commission is investigating Veco’s plan to pass on an average of 31 centavos per kilowatt-hour (kwh) to consumers as a result of an increase in the cost of power from the Cebu Private Power Corp. (CPPC).
CPPC supplies about 62 megawatts a day or 25 percent of the total electricity distributed by Veco.
Bontuyan said that as a quasi-judicial body, the ERC cannot act motu propio, so it cannot modify its decision on its own will or initiative.
He said Veco has to file a motion for clarification on the ERC decision granting CPPC and Veco provisional authority to implement an interim agreement that contains a new power pricing scheme.
Consumers and even the Freedom from Debt Coalition (FDC), which is opposing the power rate adjustment, may also seek clarification from the ERC.
The pricing scheme in the interim agreement allows CPPC to raise by an average of P1.09 per kwh the cost of electricity it is selling to Veco.
Bontuyan said the ERC decision provided that Veco can pass on the additional cost of power through the Generation Rate Adjustment Mechanism (Gram).
But he said that since Veco’s rates are still unbundled (not broken down), it cannot use the Gram for cost adjustments.
Veco decided to use the power cost adjustment (PCA) formula to pass on to consumers the additional cost of CPPC power.
Bontuyan said the ERC decision did not mention the PCA.
“It is not clear in the ERC decision (on the interim agreement) if the PCA can be used,” he said. “Veco made the interpretation that since its rates are still unbundled, they can use the PCA. Only ERC can clarify if this can be done.”
Still pending
He said the ERC Visayas regularly monitors the rates of electric distributors and reports to its head office, but it does not have the authority to investigate if a certain power firm’s rate adjustment is legal or not.
The ERC is yet to decide on the petition for unbundling of rates filed by Veco.
Veco public information officer Ethel Taneo-Natera pointed out that the PCA is designed to reflect increases or decreases in the cost of power supplied by National Power Corp. (Napocor) and independent power producers (IPPs) like the CPPC.
“We can use it (PCA) because our rates are not yet unbundled,” she said.
Adjustments
She added that once Veco’s rates are unbundled, the power firm will follow whatever the ERC orders, which would be to use the Gram.
Gram is an adjustment recovery mechanism that replaces the fuel and purchased power cost adjustment and distribution utilities’ purchase power adjustment.
With Gram, there will be a quarterly adjustment in the generation rate (cost of producing power) to reflect changes in fuel and cost of power from IPPs.
Adjustments through Gram will be reviewed by the ERC before the adjusted rate can be passed on to consumers. LAP
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