02 April 2009
– The Freedom from Debt Coalition today filed a motion to recall, with prayer for temporary suspension, the provisional authority the Energy Regulatory Commission granted to the National Power Corporation (NPC) and Power Sector Assets and Liabilities Management Corporation (PSALM) allowing electricity rates to increase by P0.4682 per kWh, P1.1460 per kWh and P0.7147 per kWh in the Luzon, Visayas and Mindanao grids, respectively.
FDC vice president Etta Rosales said: “Under conditions of deepening economic crisis, the worst of which is yet to come, the Government together with its agencies is duty-bound to protect the citizenry against the onslaught of the crisis which will affect all sectors of society. In this regard, ensuring the enforcement of strict regulation in accordance with due process and due diligence can never be over-emphasized. As the government's agency mandated to protect the citizen's interest against unfair electricity rates, the ERC has blatantly abused its authority and violated its own raison d'etre by illegally granting a 12% return on rate base to electricity providers without clear substance and evidence to the detriment of the general public.”
Lawyer Renecio Espiritu Jr, FDC legal counsel, outlined the group’s grounds for filing the motion which are:
1. The grant of the 12 percent Return on Rate Base (RORB) is illegal. According to its charter, NPC’s allowable RORB is pegged at 10 percent. Its previous RORB was 8 percent;
2. The ERC cannot impinge, by the exercise of rate regulation, into areas of legislative and management policy;
3. The Provisional Authority was issued despite deficiency in evidence. Instead, the ERC cited figures not found in the records. In fact, the Joint Application is so deficient in substance that it merits outright dismissal;
4. The assumption that sales of electricity will decrease with the privatization of NPC power plants, thus resulting in the increase of rates due to the relatively higher costs for the remaining plants, is not supported by evidence;
5. The proper treatment of revenues from ancillary service, One-Day Power Sales (ODPS), and Wholesale Electricity Spot Market (WESM) sales must be deducted from the revenue requirement;
6. The Power Barges 101, 102, 103, 117 and 118 are NPC-IPPs and therefore must not be included in the rate base computation. This is tantamount to double compensation; and,
7. The provisional authority violates due process.
Due to protests in Visayas and Mindanao and to offical interventions by local government units, consumer groups and FDC, the ERC modified its February 16 Order and reduced by 30.84 centavos the provisional increase of P1.1460 per kWh in Visayas it earlier granted to NPC-PSALM “taking into account the impact of the sale of NPC’s Panay and Bohol diesel power plants.”
“While we welcome this modification as a validation of our arguments against the provisional increase, we urge the ERC to recall and revoke the joint application of NPC and PSALM due to lack of substantial basis to warrant even a provisional approval of its petition. We will continue to intensify mass protest and heighten consumer vigilance to ensure a just and reasonable price of electricity in our country today,” said Rosales. -30-