07 October 2011
Following is the statement of the Freedom from Debt Coalition, which was read by its president Ricardo B. Reyes, during a press conference held this morning in Quezon City. Various groups and local government officials likewise issued their support to the National Day of Protest, dubbed “Power-Off,” which will be held on October 11, 7:30 PM to 8:00 PM.The demands mentioned in the statement are just part of a seven-page proposed measures, entitled “Declaration of Unities and Action Points,” to address problems besetting the electric power industry. The declaration was an output of the FDC-sponsored “National Power Summit” held last June 25-26 in Quezon City. It contains a long list of proposals on topics such as renewable energy; debts of the National Power Corporation; how to reduce power rates; making power industry more efficient, reliable and secure; regulation; and, women under power privatization and regime of Electric Power Industry Reform Act of 2001 (EPIRA).A Call for Nationwide Power-Off on October 11:Cut electricity rates, Overhaul EPIRA
We are happy to announce that our call for a National Day of Protest on October 11 against the skyrocketing cost of electricity is gathering more and more support from many sectors throughout the country. On this day, from 7:30 pm – 8:00 pm, there will be a Power-Off – communities, offices and households in various parts of Luzon, Visayas and Mindanao will switch their lights off and hold noise barrage.
We can no longer bear the current power rates in our country. It is already the highest in Asia, higher than Japan. To raise it further by entertaining the new applications for power rate increases now submitted to the Energy Regulatory Commission (ERC) would be unconscionable. Our people have long been overburdened by the ever-rising cost of living and the damages on lives and livelihoods caused by climate change. Our industry and agriculture continue to decline. Our services are always threatened by the unrelenting global financial crisis.
There are more reasons today to bring down the power rates and no reason at all to increase them. Ten years after the enactment of EPIRA or the Electric Power Industry Reform Act of 2001, its promise to bring down electricity rates, ensure reliable and accessible power supply, and promote competition in a privatized power industry never happened. What has come about is the complete opposite – ever rising cost of electricity, uncertain power supply to current users with many more in the countrysides having no access to electricity, and an industry that has been gobbled up by five super-rich oligarchs in our country.
After ten years, we are asked to pay for power rates that are much, much bigger than the cost of what we consume. We are asked to pay for the National Power Corporation (Napocor) debts called stranded debts and Napocor contracted commitments like stranded costs. We are asked to pay for the many incentives given to the private sector to reduce their risk of doing business in the power industry. We are asked to pay value-added tax (VAT) on power to support government in addition to the many taxes we already pay. And we are asked to pay for arbitrary, even baseless measures to determine electricity costs like the indexation of natural gas in Malampaya to international oil prices and geothermal power to the price of coal, and the adoption of the Performance-Based Rate Methodology.
We demand the reduction of power rates, a stop to the privatization of public assets and a review to overhaul EPIRA.
We demand the following:
- Stop privatization of remaining Napocor assets and contracts. Among these assets are the Angat hydro-electric power plant in Norzagaray, Bulacan, the Unified Leyte Geothermal Plants in Eastern Visayas, and the Agus-Pulangi hydropower complex in Mindanao;
- Suspend all pending hearings on petitions for higher electricity rates before the ERC, including the petitions on Stranded Debt and Stranded Contract Costs filed by Power Sector Assets and Liabilities Management Corporation (PSALM) and Napocor;
- Remove value-added tax (VAT) on power;
- Revert to the much simpler Return-on-Rate Base (RORB) methodology which allows power firms to collect a maximum 12-percent profit, instead of the current Performance-Based Rate (PBR) which allows them to earn more than 20 percent;
- Stop collecting and refund to consumers the additional basic generation charge the ERC provisionally granted to PSALM and Napocor in 2009 – P0.4682 /kWh in Luzon, P0.8376/kWh in Visayas, and P0.7147/kWh in Mindanao; and,
- Stop the indexation of or pegging the prices of natural gas and geothermal steam to the international prices of oil and coal, respectively. This indexation makes the prices of electricity generated using natural gas and geothermal steam become higher, not to mention becoming vulnerable to price fluctuations in the world market for oil and coal. (30)