01 October 2007
For the past six years, the Filipino people have long endured the skyrocketing price of electricity – a far cry from the government’s promise to bring down electricity rates with the passage of the Electric Power Industry Reform Act (EPIRA) in 2001. To date, the Filipino people have yet to see a significant decrease in their electric bill and not mere drops in the bucket.
Prior to the EPIRA, the electricity rate of residential consumers was P5 per kilowatt-hour (kWh). Today, it has more than doubled at P11/kWh. As a result, industrial electricity rates in the country as of 2006 made the Philippines no.1 in terms of highest electricity rates in Asia.
Electricity rates may reach P15/kWh—thrice the pre-EPIRA amount—because of the additional P2.60/kWh for the recovery of generation companies that traded electricity at WESM rates and the P2/kWh that will be recovered from the consumers for the stranded costs of the National Power Corporation (NPC) and the Power Sector Assets and Liabilities Management Corporation (PSALM).
The P2/kWh stranded cost recovery is for the $9.1 billion NPC debts assumed by the national government and for the government’s financial obligations under its contracts with the independent power producers (IPPs). The Department of Energy said the debt would be paid either through an increase in rate or through borrowings. Either way, the Filipino people will be saddled by this $9.1 billion debt which far outweighs the potential $329 million debt from the anomalous ZTE contract for the National Broadband Network project.
Consumers would also be facing compounding burdens with the Energy Regulatory Commission’s move to change the rate determination from return on rate base to performance-based rate. If this rate methodology is adopted, further increase in power rates will be shouldered by the consumers as the profit margin of distribution utilities will go beyond the current 12% RORB cap.
Thus, we, electricity consumers in the Philippines, have come together under the alliance – EmPOWER Consumers – to put a halt to our misery and seek redress from all the burdens the government and electric companies have caused the people.
We, the EmPOWER Consumers, unite to demand from the government bring down electricity rates.
We call for a halt to the privatization of the National Transmission Corp. (Transco) and of the generation plants using natural resources such as hydropower and geothermal, as well as the continuous payments to the onerous IPP contracts guaranteed by the government. These will only further aggravate the already high power rates while ensuring risk-free profits for the private sector.
We call for the removal of the Value Added Tax on power. VAT, effectively, adds 10 percent to the electric bill of consumers, which adds up to the financial burden of the people.
We also call for the genuine democratic ownership of the 119 electric cooperatives.
In truth, what we have paid for both consumed and non-consumed electricity is enough to make us consumers part owners in the electric power industry! Hence, we seek the democratization of access, ownership, and control in the power industry to give us a voice in decisions affecting the generation, transmission and distribution of electricity – a vital necessity in this modern life and progress.