EPIRA to blame for new power rate hike—Bayan

By INA ALLECO SILVERIO
Bulatlat.com

Expect paying more for your electricity this month as the Energy Regulatory Commission (ERC) has recently allowed Manila Electric Co. (Meralco) to increase its rates yet again. Meralco said power rates for October are expected to rise by as much as 14.19 centavos (US$0.33) per kilowatt per hour because of higher generation rates. The increase comes in the wake of two destructive typhoons that hit Meralco franchise areas.

The ERC said Meralco is justified in raising rates because it has to recover the P883.93 million (US$ 20,558,139)in power costs it did not collect last year.Because of charges and interest, however, consumers will have to pay P944.23 million (US$21,953,488) for the uncollected costs.


(bulatlat.com file photo)

In 2010, the power firm implemented a staggered rate hike, saying that the cost of supply of electricity from power suppliers increased supposedly because of El Niño and the shutdown of a number of generating plants. Electricity rates at the Wholesale Electricity Spot Market (WESM) went sky-high in the first months of the year and consumers were threatened with a P1.83 per kilowatt-hour hike in Meralco’s March 2010 charges.

Beside WESM, Meralco’s other power suppliers, state-owned National Power Corp. and private power generating companies, also charged hefty rates because of higher fuel costs last year.

“To mitigate the effects of the increase in generation cost, Meralco proposed to lower the generation cost from P6.76 per kilowatt-hour (US$ .1627) to P6.32 (US$.1649) per kilowatt-hour and the balance thereof to be spread over a six-month period starting April 2010 in the amount of P0.07 per kilowatt-hour,” the ERC said.

The ERC explained that it only granted a P0.03 per kilowatt hour hike instead of P0.07. It said that power utilities should be allowed to recover the cost of their WESM purchases in full.
The Bagong Alyansang Makabayan (Bayan) said the Electric Power Industry Reform Act is the cause of the constantly rising power rates.

“The power industry is no different from the oil industry. For the most part, it is privatized and deregulated. We are at the mercy of private corporations greedy for profits which do not care whether a calamity has hit us or not,” said Bayan secretary general Renato M. Reyes, Jr.

Reyes blamed the Epira for the consumer’s power woes. He said the Aquino government’s seeming indifference to the problem of high power rates has affected even business groups.

Based on a a joint report released by Bayan, Ibon Foundation, Agham and the People Opposed to Warrantless Electricity Rates (POWER) to mark 10 years of the EPIRA, power rates have doubled since the law was implemented.

According to Reyes, electricity rates charged by Meralco have increased by more than 112 percent while NAPOCOR rates have jumped by more than 95 percent in the past 10 years.

“ Despite these alarming levels, we have not heard anything from the Aquino government. It is almost as if government is oblivious to this problem,” he said.

The Power study also said more than half of the total generation capacity, the entire transmission system and a large part of distribution, are now controlled by a few large companies. It said that with the advent of privatization, only three groups control 52 percent of generation capacity – San Miguel Corporation (SMC), Aboitiz, and the Lopez group.

“They are the big three in the power sector. The problem here is that we are definitely at the mercy of private profits. It is deregulated. There is no government intervention. Pricing will depend on so-called market forces. The so-called competition among the big power generators has not happened and will not likely happen considering their market share,” Reyes explained.

“The Aquino government should rethink and junk the Epira because the promises of competition and lower power rates have not been fulfilled. Government must act now especially since the people of Luzon are still recovering from the effects of two devastating typhoons,” he added.

Aside from the increase in generation rates, the universal charge may also increase if the ERC allows PSALM to recover its stranded debts and stranded contract costs. This could reach up to 39 centavos per kWh.

Repeal Epira

During recent deliberations on the Department of Energy’s budget in Congress, Gabriela Women’s Party Representative Emmi De Jesus said the Epira should be repealed as a first step to bring down electricity rates.

“It has been 10 years since Epira was implemented. Its proponents promised that with the Epira, electricity rates will go down. Now, consumers suffer virtual electrocution every time they receive their electricity bill. The skyrocketing electricity rates, along with the incessant increase in the prices of basic goods and prime commodities, continue to burden poor families,” she said.

According to De Jesus, Meralco rates for residential users rose by 112.5 percent and those of the NPC went up by 86 percent over the past 10 years.

In 2001, the NPC’s debts were at $16.39 billion. By 2010, its debts were pegged at $15.8B (P713.64B) despite PSALM (Power Sector Assets and Liabilities Management) shelling out $18B in 10 years to settle the NPC obligations.

“This financial obligation is passed on to the citizens as taxpayers, who also shoulder higher power rates. EPIRA provided the legal framework for the privatization of the National Power Corporation and deregulation of the power industry. This paved the way for the creation of the Big 3 in the power industry who now controls 52 percent of the industry, namely, San Miguel Corp. (20 percent); the Lopez group (17 percent); and the Aboitiz group (15 percent),” explained the Gabriela solon.

“As long as President Aquino coddles the interests of the power giants, Gabriela Women’s Party will continue to voice out the demands and wishes of our marginalized women and their families. We will continue to lobby for the repeal of EPIRA. We will likewise call for the immediate enactment of HB 4847 or the Act Ordaining Reforms in the Power Industry,” ended De Jesus. ()

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