27 March 2009
– A nationwide advocacy coalition opposing the power rate hike will continue to move for the recall of the provisional authority granted by the Energy Regulatory Commission (ERC) to National Power Corporation (NPC) and Power Sector Assets and Liabilities Management Corporation (PSALM) despite the recent order of the Commission reducing the provisional increase for the Visayas Grid by 30.84 centavos per kWh.
The Freedom from Debt Coalition (FDC) said the ERC Order dated March 23 modifying the provisional increase from P1.1460/kWh to P0.8376/kWh for the Visayas Grid is hardly a consolation for consumers burdened by the second most expensive electricity rate in Asia.
Nevertheless, FDC welcomes the recent ERC order as it confirms the validity of its arguments presented before the ERC in the series of public hearings held in Luzon, Visayas, and Mindanao.
The ERC modified its February 16 Order and reduced by 30.84 centavos the provisional increase of PhP1.1460 per kWh it earlier granted to NPC-PSALM “taking into account the impact of the sale of NPC’s Panay and Bohol diesel power plants.”
The said sale delivered impacts on NPC-PSALM’s proposed rate adjustment application by as much as 30.84 centavos, according to Lourdes S. Alzona, PSALM Vice President for Finance.
NPC’s rate base, from where the Return on Rate Base (RORB) is computed, should contract as a result of these sales because the utility would be operating only within the remaining plants thereby reducing considerably its operating expenses, fuel costs and other related expenses.
This is one of five major points argued by FDC in its petition as intervenor before the ERC.
However, FDC was quick to point out that while the lowering of its rate base should lower NPC’s generation rate, that cannot be said on the country’s over-all power rate as long as full cost recovery mechanism are enjoyed under the privatized set up.
For FDC, the recent ERC order only reveals that its analysis have been accurate all along especially when it highlighted that the increase petition is nothing but a move to raise funds, again to pay for NPC maturing debts, out of the pocket of electricity consumers.
We have been rescuing NPC from indebtedness as taxpayers in the form of government’s bail-out subsidy and as consumers in the form of electricity rates increases, averred by FDC.
The Visayas chapters of FDC namely; Iloilo, Negros, Leyte and Cebu were all present during the hearing in relation to the provisional authority issued by the ERC in Cebu City last March 19 and 20.
Further, the group would like to emphasize that the process is not over yet as another hearing is being scheduled on April 21, 2009 in Cebu City.
Moreover, FDC would also like to reiterate its call for the Senate to pursue resolution 946 filed by Senator Mar Roxas, a resolution to conduct an immediate investigation regarding the recent NPC rate hike.
In the forthcoming ERC hearing, the group is demanding a recall of the order issued by the Commission because the petition lack substantial basis to warrant even a provisional approval of its petition.
At the same time, FDC will continue to intensify mass protest and heighten consumer vigilance to ensure a just and reasonable price of electricity in our country today. -30-