Power consumers brace for rate hike in July

Some 60 million electric power consumers in the country will begin to absorb an estimated 35 percent increase in their monthly bill this coming July following two successive generation rate hikes by the National Power Corp. (Napocor) and the implementation of the expanded value added tax law.

The largest Mindanao-based consumer and farmer group, Sargen Integrated Federation, Inc. (SIFI), said all of the power sector’s customers will start feeling the full impact of the P1.0354 (nationwide weighted average) Napocor rate hike approved by the Energy Regulatory Commission (ERC) in September last year and April this year.

Napocor said the 40 percent rate increase is vital to the continuing viability of its operations.

In addition, the SIFI said the imposition of VAT on power generation, transmission and distribution is expected to raise electric bills by an additional 10 percent.

SIFI chairman Edwin Paraluman said July looms as "one of the worst rate-shock month" for power consumers all over the country". While many appear to be resigned to the inevitability of the Napocor rate-induced and VAT-influenced increases, consumers will definitely feel the pain of the amount they will pay for their July consumption.

Paraluman said it "is important for the government to come up with mitigating measures to cushion the effect of the incorporation of Napocor rate increases and the VAT into the July bill".

While residential consumers are expected to cut back on power use, the energy saving measures may not be enough to diminish the effects of the Napocor hikes and the VAT, he pointed out.

Paraluman said industrial users are also expected to pass on the Napocor hikes and the VAT to end-users of their products. Worse, a production cutback may be adopted which could jeopardize revenues and employment, he added.

Paraluman said it is expected that distribution utilities, including the country’s 119 electric cooperatives, 18 private distributors and the Manila Electric Co. will bear the brunt of a potential customer outrage over the rate hikes.

This is why it is important that an aggressive information campaign be done to ensure that the public understands what have triggered the power rate hikes, he said. Otherwise, service frontliners will definitely be on the firing line, he added.