It is no longer a surprise that the January 2004 rate reduction from P3.4029/kWh to P3.1886/kWh proved to be short-lived. This month, Meralco has applied for a 26.97-centavo increase in generation rate through the Generation Rate Adjustment Mechanism (GRAM). This will raise the generation rate from P3.1886/kWh to P3.4583/kWh.

The Freedom from Debt Coalition asserts that Meralco rates will continue to rise because the government refuses to address the cause of consumers’ woes: the onerous IPP contracts.

President Gloria Macapagal-Arroyo claims to have lowered the PPA. The promise, however, was a mere palliative because the PPA continued to increase. The ghost of the PPA continues to haunt consumers through the GRAM: rates remain high because unused and unproduced electricity is still included in our generation rate.

The quarterly fluctuations in generation rates will remain like a hanging sword above our heads if onerous provisions of IPP contracts – fuel and purchased power cost adjustment or “take-or-pay” – are still around.

President Macapagal-Arroyo’s claim of lowering the PPA is hollow rhetoric, unless she cancels the onerous IPP contracts.

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