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Sunday, September 05, 2004
Napocor wins bid for power rate increase
By Liberty A. Pinili
With Allan I. Varquez
CEBU CITY -- If you haven't made plans to use less electricity, here's another reason you should start now.
Starting on Sept. 26, the National Power Corp. (Napocor) will begin increasing power rates by an average of 26 centavos per kilowatt-hour (kwh) in the Visayas.
The Energy Regulatory Commission (ERC) decided late Friday afternoon to grant Napocor provisional authority to impose a power rate increase.
But the increase, in the case of Visayas, is only 14 percent of what Napocor had proposed.
Napocor proposed a nationwide increase of P1.87 per kwh, which would have raised the cost of electricity to an average of P4.31 per kwh.
In the Visayas, the average proposed increase was P1.77 per kwh.
Consumers of distribution utilities like the Visayan Electric Company (Veco), which gets power not just from Napocor but also from independent power producers, will see the increase in their January 2005 bill.
Consumers of distribution utilities and electric cooperatives whose electricity come solely from Napocor will see the increase in their bill starting Nov. 1, 2004.
The ERC also cut down by half Napocor's proposed increase nationwide.
Napocor is only allowed to raise the cost of electricity nationwide by around 97 centavos per kwh.
In Luzon, power rates will increase by an average of P1.22 per kwh and in Mindanao, 22 centavos per kwh.
ERC Chairman Rodolfo Albano said Saturday Napocor could begin imposing new power rates by Sept. 26.
The increase will be reflected in the Oct. 30, 2004 bill on electric cooperatives and distribution utilities that buy electricity from Napocor.
Not hopeless
Albano said the ERC also unanimously decided that the time of use (TOU) electricity pricing scheme should be optional for distribution utilities and electric cooperatives.
He said those opposed to the increase could either file a motion for reconsideration within 15 days, or ask for a restraining order from the Court of Appeals or the Supreme Court to prevent Napocor from imposing the new power rates.
Since the authority granted on Friday is only provisional, the ERC will continue to hold public hearings on whether it will make the new rates final.
The ERC has one year, from Friday, to decide whether to grant Napocor final authority to impose the power rate increase.
Albano explained that power in Luzon is the most expensive because it comes mostly from gas turbines, oil-based and coal power plants.
Mindanao has the cheapest electricity as it is sourced mostly from hydropower plants.
Earn less
Albano said the ERC decided to allow Napocor to earn P88 billion per year, instead of the P113-billion a year proposed by the government-owned power generation firm.
"We made our own valuation of figures presented by Napocor," he said. "The return on rate base (RORB) is still eight percent but based on our own valuation."
He said the ERC lowered the Napocor-proposed increase based on their own valuation of Napocor's assets, with only 46 percent in foreign denomination and ancillary services on an annual basis.
He said charges incurred by Napocor due to foreign exchange rates "were without hard evidence," so ERC decided that if there are such expenses it would have to be collected through the incremental currency exchange rate adjustment (Icera).
Consumers' lobby
Albano stressed that the ERC made the decision after weighing Napocor's reasons and arguments of the opposition.
"We are just doing our job. If those opposed to it (decision) are still not happy, nasa kanila na yun," he told Sun.Star in an interview.
Albano also warned power distribution utilities against making additional profits on the increase.
A consumers' group will file a motion for a temporary restraining order this week to stop the power rate increase.
The Association of Concerned Commuters and Consumers (ACC) wanted Congress to scrutinize how Napocor used its P600-billion loan to offset its losses, before acting on the power firm's application for new rates.
ACC president Souie Mercado said they are also asking legislators in Cebu to look into the business contract between Napocor and the Philippine National Oil Corp. (PNOC).
Supply check
ACC reported that Napocor has lost nearly P1 billion in 10 years by buying coal from PNOC.
"This is highly irregular and anomalous. Napocor would not have this dilemma had it bought directly its supply of coal from the local suppliers. PNOC has been profiting millions of pesos from Napocor with this current set-up," he told reporters in a press conference held at the St. Jerome Bible Center.
Local suppliers sell coal at P1,400 per metric ton, ACC said.
PNOC, however, has been supplying the power company with coal at P2,123.61 per metric ton. The power firm needs 350 tons of coal a day for one thermal plant alone. It has two such plants.
(September 5, 2004 issue)
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