23 April 2007
The reported 56-centavo/kwh refund by Meralco for its overcollection of foreign exchange and fuel costs in its power suppliers in the past months is welcome news to electricity consumers especially during this time when every centavo counts, according to an advocacy group.
However, the Freedom from Debt Coalition said this reduction will not be felt if the two latest petitions for recoveries by Meralco amounting to P1.73/kwh will be approved by the Energy Regulatory Commission. If the refund amount is deducted, there will still be a net increase of P1.23/kwh. Should the ERC approve these petitions, said amount would be the highest electricity rate increase in history.
In early 2005, the consumers were charged with a P1.03/kwh average increase – the highest increase so far – for the generation rates of the National Power Corporation to entice investors to buy its plants in the name of privatization.
“Is it mere coincidence that while Meralco is waiting for a resolution to its P1.73/kwh rate hike petition before ERC, the regulatory body has already approved a rate reduction of P0.56/kwh? Or are they trying to feed the people with good news before the May 14 elections and a very bad one later?” asked FDC secretary-general Milo Tanchuling.
“Obviously, the government and power utilities are conditioning the minds of the consumers to get used to recurring increases and reductions in electricity rates. We are forced to resign ourselves to unaffordable rate hikes,” lamented Tanchuling.
To bring in competition and lower electricity prices, the government started to promote the wholesale electricity spot market (WESM) since June of last year. The FDC claimed that this does not appear to be the answer in arresting the skyrocketing power rates.
“In fact, the increase in prices in WESM is one of the reasons for the high recoveries that Meralco is applying for. Power from WESM appears to be about P6/kwh – P7/kwh based on its billing to Meralco for the month of December 2006. This amount is higher than that of National Power Corporation (P4.35/kwh) and of Meralco’s IPPs—First Gas Sta. Rita (P4.70/kwh) and San Lorenzo (P4.80/kwh),” explained Tanchuling.
“We urge the ERC to immediately resolve the price manipulation case against WESM before attending to the two petitions of Meralco for recoveries. Consumers must not be made to pay for the manipulations of Power Sector Assets and Liabilities Management Corporation (PSALM) and a flawed WESM design,” Tanchuling said.