26 April 2005
Last Friday, the Energy Regulatory Commission (ERC) released its final decision increasing National Power Corporation’s (Napocor) generation rate by P0.056 per kWh on top of the previous P0.9798 per kWh provisional increase. Napocor’s rate hike will take effect today, pushing generation rates up to P1.035 per kWh.
The ERC’s decision reeks of indifference to consumers not only because it is unjustified, but also because it came at a time when the public is riling under heavy burden of rising costs.
What’s more is the ERC’s duplicity of approving not one, but three power rate increases! Aside from the rate hike, ERC also granted Napocor average increases of P0.42 per kWh through the Generation Rate Adjustment Mechanism (GRAM), and P0.003 per kWh via the Incremental Currency Exchange Rate Adjustment (ICERA). The GRAM and ICERA padded Napocor’s rate hike by P0.42 per kWh without undergoing any public hearing.
Summing all of these, Napocor’s rate increased is actually P1.46 per kWh – higher than the figures that ERC and Napocor claim.
Contrary to ERC Chair Rodolfo Albano’s claims that the rate increases are justified, we see it otherwise. Even with all its investigative and penal powers, the ERC failed to act on the fundamental reasons of Napocor’s continued financial losses – its onerous contracts with independent power producers (IPPs) and its management inefficiencies.
On the other hand, Malacañang equally shares blame for stepping aside while the public welfare is trampled upon. President Arroyo failed to protect the public because of her proclivity in honoring these onerous IPP contracts, even if her own government found them grossly disadvantageous to the public.
To add insult to injury, Napocor can now recover the P0.40 per kWh reduction that President Arroyo ordered in 2002 when she gave in to the people’s protests against the PPA.
Any power rate hike will be mere palliatives in plugging Napocor’s losses unless the government cancels the onerous IPP contracts. Thus, the Freedom from Debt Coalition reiterates its call for the government to cancel the onerous IPP contracts that continues to bleed Napocor dry.
Unless the government makes concrete and long-lasting solutions to these problems, consumers will continue and intensify protests against power rate increases.