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Saturday, January 14, 2006
Bloc slams power firm on 'bloated' rate hike
By Lizanilla J. amarga
CAGAYAN DE ORO CITY -- The estimates and basis for the 22 to 24 percent increase being petitioned by National Power Corporation's Transmission Corporation (Napocor-Transco) are "bloated" and "inconsistent", a group led by a Cagayan de Oro City councilor said.
Councilor Benjamin Jose Benaldo, which heads the Mindanao Power Bloc, said the Napocor computation will result in higher and "very unreasonable" power rates in Mindanao.
Benaldo and bloc members attended Friday's hearing initiated by the Energy Regulatory Commission at the Cagayan de Oro City Council session hall.
Melchie Ambalong, Lanao Power Consumers Federation head, and member Nestor Daguma raised concerns as to the plans of Transco to put up another power line from Iligan City to Kirahon, Tagaloan, Misamis Oriental.
They believe the cost of this new project will be passed on to power consumers without them actually benefiting from it.
But Transco top executive Emy Abellanosa told Sun.Star Cagayan de Oro Friday that their estimates and figures are in order.
He said their new Iligan-Kirahon power line project is pursuant to their mandate to build a power highway all over Mindanao.
ERC Commissioner Rauf Tan will call for two more hearings before resolving the rate increase asked for by Transco.
Disadvantage
Also Friday, Benaldo told reporters they are protesting the 22 to 24 percent increase being petitioned by Transco for 2006 to 2010.
He then showed how Transco's figures for foreign exchange and inflation rates supporting the 22 to 24 percent power hike petition are "bloated" and "inconsistent."
"Bloated ra kaayo alkansi gyud ang katawhan ani (The people will really be placed at a disadvantage)," he said. Foreign exchange and inflation rates are the topmost factors being considered in the computation of power rate hikes.
In the case of the foreign exchange rates (Forex), Benaldo pointed out that Transco's projections for foreign exchange rates this 2006 went as high as P59 per US$1.00.
"I even doubt that when this year ends the exchange rate would even reach P58 per US $1.00," he said.
Benaldo said Transco based its foreign exchange rate estimates on Power Purchase Parity (PPP) that projected exchange rates to go up to P62 per US $1.00 by 2010.
Barrage of questions
Benaldo said Transco should have based its Forex estimates on the projections by Economic International Unit (EIU), which "has so far estimated it right to put the Forex somewhere between P52 to P53 per US $1.00."
"They should use the EIU because it is the EIU's figures they are using in estimating the inflation rate up to 2010. To use the PPP is to be inconsistent," he said.
The councilor also voiced suspicions that the power rate demands presented by Transco could also be bloated to justify the establishment of another power line highway and to fund other projects.
"But this is highly technical we are still going to study this but I suspect the demand figures could also be bloated as well," he said.
But Abellanosa said they have not bloated any figure just to further push their petition for it would mean facing a barrage of questions from the public.
"Those (forex and inflation rates) are not bloated, they are just the right estimates because pinag-aaral namin yon (we studied those figures)," he said.
"There is no good reason to bloat the figures for if we do we will be facing a lot of questions from the people and we will be having a hard time justifying our petition."
Allowable revenue
Abellanosa said they are not exactly asking for a 22 to 23 percent increase because what the ERC will determine only is their Maximum Allowable Revenue (MAR).
He said this would mean that should ERC determine that Transco's MAR is only up to P24 billion and that Transco has actually collected P26 billion then this would mean a reduction in their rates as they are only allowed P24 billion.
"How that is transmitted in a per kilowatt basis bahala na kami basta (that's up to us as long) for that year mao rana ang kolekta namin kay mao raman kana ang gi-allow (that is only the allowable collection). Kung ang allowable revenue is nasobrahan namin pag-collect then we reduce the rate," he said.
Abellanosa earlier said they have not asked for any rate hike for the past five years and they expect ERC to at least grant a P0.10 per kilowatt hour hike.
He said they have already submitted a draft determination of their MAR but this was immediately reduced by ERC.
"Draft pa lang yon binabawasan na sa ERC," he said, and voiced concerns as to how they would be able to fund projects that are already in the pipeline. (Sun.Star Cagayan de Oro/Sunnex)
(January 14, 2006 issue)
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