03 March 2005
Protesters led by women of the Freedom from Debt Coalition stormed the gates of Napocor today and staged a die-in in front of the Energy Regulatory Commission office as they expressed their rage over new round of power rates increases.
In the next few days, consumers will be made to bear a P0.91/kWh increase through the Generation Rate Adjustment Mechanism (GRAM) and the Incremental Currency Exchange Rate Adjustment (ICERA). Napocor wants to recoup its losses from the P0.40/kWh cap on its purchased power cost adjustment – a palliative solution by President Arroyo to placate the people.
Power rates temporarily decreased when the President imposed this cap in May 2002. But the President failed to address the fundamental cause of high power rates -- the onerous contracts with independent power producers. This resulted in the further deterioration of Napocor’s financial condition.
With a bankrupt Napocor, the government is now bent on recovering losses brought by the P0.40/kWh cap by adjusting Napocor’s generation rates through GRAM.
Aside from the GRAM, Napocor wants to adjust its rate through the ICERA to recoup its foreign exchange differentials. This will result in a P0.51/kWh rate increase in generation rates, on top of the Napocor’s GRAM application.
ERC is set to rule on Napocor’s GRAM and ICERA petitions on March 5, the deadline for the 45-day period for ERC to decide under its rules on GRAM. Thus, consumers expect a power rate increase of P0.91/kWh in the next few days.
To top it all, the ERC is expected to rule on Napocor’s P1.87/kWh rate increase petition within the month. With a P0.98/kWh provisional increase granted last year, the ERC is expected to grant Napocor’s remaining P0.89/kWh petition, further pushing generation rates up by P1.80/kWh.
This unconscionable situation is brought by the government’s continued payments for onerous IPP contracts and its unrelenting promotion of Napocor’s privatization. In the end, consumers are forced to bear the burden of higher power rates.
FDC reiterates its call for the government to cancel onerous IPP contracts. Consumers should not be obligated to pay for the mistakes of the government in its attempt to entice the private sector.