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Thursday, June 19, 2003
Higher Cebu power rates starting June 25
By Jasmin G. Suma-oy
CEBU -- The Energy Regulatory Commission (ERC) has compelled the National Power Corp. (Napocor) to collect an additional 16 centavos in generation rate, which it believes could help ease the Cebu Private Power Corp.’s (CPPC) predicament.
This brings bad news to consumers, though, because the order would result in higher electric bills starting June 25.
It’s not yet known if the amount is enough to sustain CPPC’s venture and abort its suspension of operations on July 25.
CPPC general manager Roger Lim yesterday said they have still to get an official notice of the order and assess its impact on their operation.
ERC Chairman Manuel Sanchez sent a letter yesterday to Power Sector Assets & Liabilities Management Corp. (Psalm) president Edgardo del Fonso to immediately execute the ERC’s May 15 order adjusting from P2.08 per kilowatt-hour (kwh) to P2.24 per kwh Napocor’s generation rate.
“They should have implemented the May 15 decision knowing this could alleviate the situation of the CPPC,” Sanchez told Sun.Star in a phone interview.
Nationwide rate
Although Sanchez singled out the CPPC in Cebu, the new generation rate of Napocor will be implemented nationwide.
In its May 15 decision, ERC approved a revised generation rate schedule of Napocor effective in the billing month of May 2003. The rate is P2.12 per kwh for Luzon, P2.24 for the Visayas and P1.02 for Mindanao.
Psalm deferred the use of the new generation rate because it has filed a motion for reconsideration.
In the third week of May, Psalm filed a new time-of-use (TOU) rate seeking an average increase of P2.80 per kwh, which is 56 centavos more than what the ERC granted in its May 15 decision.
The ERC has yet to conduct a hearing on the motion for reconsideration.
But according to Sanchez, Napocor can already use the new rate even if its appeal is pending.
“The implementation of the May 15 decision would help CPPC. Even how small the amount is, my understanding is it would still help,” Sanchez told Sun.Star.
Take over
If ERC approves Napocor’s petition for a new TOU rate that carries an average generation rate of P2.80 per kwh, CPPC officials earlier said this could sustain their operations.
Sanchez said if Napocor’s generation rate of P2.24 per kwh cannot make CPPC reconsider its decision to suspend operation on July 25, the Visayan Electric Co. (Veco) can take over to make sure that there will be no power interruption in its serviced areas.
Veco has over 233,000 residential consumers in Metro Cebu.
Reynaldo Regis, Napocor Visayas manager for sales and commercial relalations, said that once they receive a copy of the ERC order from Napocor Manila, they can start applying the new generation rate on their June 25 billing to Veco.
Oscar Rodriguez, Veco assistant chief of economic analysis and planning division, said they still have to compute how much would be passed on to consumers when Napocor increase its selling price by 16 centavos per kwh.
He said, though, that any increase in the Napocor rate would be reflected under the purchased power cost (PCA) in the households’ electric bills.
Selling price
If Napocor increase its rate, CPPC can also automatically adjust its selling price to Veco.
CPPC is selling power to Veco at less than two percent of what Napocor charges Veco.
So aside from Napocor’s increase, consumers will also have to brace themselves for CPPC’s rate adjustment.
Meanwhile, contrary to the expectation of the Department of Energy (DOE), there is no ongoing regulation process in the ERC that involves the CPPC’s 15-year contract with Veco.
“There is nothing before us. It’s a private contract between two companies. We have no jurisdiction,” Sanchez said.
They can only act on the problem if Veco, which belongs under the regulated industry being a power distributor, asks for the rate adjustment.
Veco however, is also against the rate restructuring being asked by CPPC.
CPPC, which is supplying 62 megawatts daily to Veco, cannot directly go to the ERC because it is under the deregulated sector.
The CPPC, an independent power producer supplying 25 percent of Veco’s total demand, has agreed to extend its planned suspension from June 15 to July 25.
It wants to temporarily shut down its power plants in Carbon, Cebu City because of huge losses due to President Arroyo’s order to cap Napocor’s purchased power adjustment and high cost of fuel. Sun.Star Cebu
(June 19, 2003 issue)
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