More power rate hikes in the offing, lawmaker warns

Eastern Samar Representative Ben Evardone on Saturday said that consumers should brace themselves for more increases in electricity rates as he disclosed that four more petitions for rate adjustments had been filed before the Energy Regulatory Commission (ERC).

He said the National Power Corp. had asked for an increase of P0.2759 per kilowatt hour (kWh) as part of the Universal Charge of NPC Missionary Electrification Subsidy while the Power Sector Assets and Liabilities Management Corp. (PSALM) had petitioned for an increase of P0.3666 per kWh  in Luzon to cover the stranded contract costs of NPC.

Additionally, he said, the NPC had also petitioned for an increase of P0.0313 per kwh to pay for stranded debts, and for the increases of P0.8332 per kWh for Luzon, P1.3815 per kWh for Visayas and P1.0686 per kWh for Mindanao to comprise its New Basic Generation Rates.

Evardone said the petitions were on top of the 15 others pending in the ERC that were filed by electric cooperatives and the Manila Electric Co.

“If approved, all these increases would be added to the current electricity rates,” he said.

Evardone urged the ERC to carefully examine the applications for increases as these would translate to added burdens to consumers. Also, he said, higher power rates would make the country less competitive in the eyes of foreign and domestic investors.

At present, the Philippines has the highest residential power rates in Asia at 24.566 US cents per kWh.

Earlier reports quoted ERC Executive Director Francis Saturnino Juan as saying that consumers might have to pay higher power bills within the next three months once the ERC approves the universal charge (UC) application of PSALM.

Juan said the ERC would act on the PSALM application filed on June 28 within the next 75 days.

PSALM has asked that it be allowed to collect 39 centavos per kWh of UC from consumers. PSALM determined the final amount for the UC-stranded debt (UC-SD) at three centavos kWh to be collected over a 15-year recovery period.

For the UC-stranded contract costs (UC-SCC), PSALM will apply for permission to collect 36 per kWh over a four-year period in accordance with formulas prescribed under the revised guidelines issued by the ERC.

The Electric Power Industry Reform Act (Epira) provides that a universal charge will be imposed on all electricity end-users for the payment of stranded debt and stranded contract costs of the National Power Corp.

The ERC will determine, fix and approve the UC to be collected from electricity consumers after an extensive review of PSALM’s applications.

The Epira defines stranded debts as any unpaid financial obligation of the NPC that has not been liquidated by the proceeds from the privatization of the generating firm’s assets. On the other hand, stranded contract costs are the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of these contracts in the market.