Posted by: empowerconsumers | October 1, 2007

EmPower Consumers bares $9.1 billion power sector debts, P5.60/kWh electricity rate hike


October 1, 2007

EmPower Consumers Alliance bares $9.1 billion power sector debts,

P5.60/kWh electricity rate hike

Group vows to block increase

Electricity consumers are up for a surprise next year as electricity rates are expected to increase three times than its price six years ago prior to the passage of the Electric Power Industry Reform Act (EPIRA).

EmPOWER Consumers, a newly-formed broad alliance of electricity consumers – residential and industrial/commercial, bared this during its launching today as they vowed to block such onerous hike that would be heavily and unnecessarily burden the poor electricity consumers.

The electricity consumers’ alliance is composed of the Freedom from Debt Coalition, former Akbayan Partylist Rep. Etta Rosales, NASECORE, Katipunan ng mga Magsisibuyas sa Nueva Ecija, and a number of groups that are either residential, industrial or commercial electricity consumers.

Former Akbayan Partylist Rep. Etta Rosales pointed out in her presentation the $9.1 billion power sector debts which dwarf the amount of potential debt from the ZTE-NBN deal is one of the two reasons for the increase. The other reason is the recovery of generation companies from traded electricity at the wholesale electricity market (WESM).

“The generation companies would be recovering P2.60/kilowatt-hour with the decision of the Energy Regulatory Commission absolving the Power Sector Assets and Liabilities Management Corporation (PSALM) from price manipulation which kicked up trading prices to P10 per kWh last year,” explained Pete Ilagan of NASECORE.

Besides this, the national government and PSALM would also be recovering P2/kWh from their stranded costs, largely due to the contracts undertaken by the state-owned power company with the independent power producers (IPPs).

“The Department of Energy said the $9.1 billion debt would be paid either through an increase in electricity rate or through borrowings. Either way, the Filipino people would 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,” said FDC Secretary General Milo Tanchuling.

The group also hit Meralco following the announcement of the National Power Corporation (NPC) that a 12-centavo per kilowatt-hour rate reduction will be experienced by Meralco customers for the electricity Meralco had sourced from NPC for the past 10 months.

EmPOWER Consumers said the rate reduction could have been enjoyed earlier and could have been higher had Meralco acted on this earlier and taken more electricity from NPC early on. “Meralco deprived consumers of such relief as it only sourced about 30 percent of its load requirement from NPC while a bigger volume of electricity is sourced from WESM until late last year despite NPC’s lower price.”

Meralco recently sources 15 percent from the WESM despite the volatility of its prices while the rest is from independent power producers owned by the Lopezes. Instead of getting the full 30 centavos per kilowatt-hour rate reduction, consumers would be getting only 40 percent of it..

EmPOWER Consumers said it would demand from the government to make true its promise to bring down electricity rates.

“The fulfillment of this promise is long overdue. Enough of band-aid solutions and empty rhetoric!” the group said.

EmPOWER Consumers vowed to oppose the privatization of the National Transmission Corp. and the continuous payments to the onerous IPP contracts by the government. It also called for the scrapping of the Value Added Tax on power which adds up to the financial burden of the people. (30)


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