Veco rate hike is less than 60 cents per kwh

CEBU, Philippines - The Visayan Electric Company (Veco) assures its customers that they will not implement the P0.6060/kwh power rate hike approved by the Energy Regulatory Commission as they are only sourcing 30 percent of its power needs from the National Power Corporation (NPC).

“NPC supplies only 30 percent of our power needs. So, dili ang full .60 centavo ang mo apply sa VECO,” VECO spokesperson Ethel Natera said, adding they have not received yet the official copy of the approval as of yesterday.

Jose Aaron Pedrosa, secretary-general of the Freedom From Debt Coalition-Cebu, said that ERC’s move in approving the applications filed by NPC and PSALM under the Generation Rate Adjustment Mechanism (GRAM) signals the expected spate of power rate increases under the “grand scheme of socializing the cost of providing power services while privatizing profit.”

Aside from the .60-centavo increase for Visayas under GRAM, Napocor and Power Sector Assets and Liabilities Management Corp. (PSALM) still have pending applications for rate increase for the recovery of “stranded debts and stranded contract costs.”

Through GRAM, any increment in the prices of fuel, purchased power and exchange rate fluctuation will be passed on to consumers. Similar to GRAM, increase under the generation charge through the recovery of stranded debts and stranded contract costs is intended pass the debt burden incurred by Napocor and PSALM to electric consumers.

“In a word, power players are guaranteed good business returns while consumers are made to bear the costs,” Pedrosa said.

FDC-Cebu reiterates its demand for the government to intervene and stop power rate hikes and jumpstart the process of reforming the power sector.

The ERC on March 26, 2012 resolved to allow Napocor and PSALM to recover under the GRAM and Incremental Currency Exchange Rate Adjustment (ICERA) Mechanism their incremental fuel and purchased power costs and foreign exchange costs incurred during the period from January 2007 up to April 2010.

Aside from Visayas, Luzon and Mindanao will also increase its power rate by 0.6904/kwh and 0.0442/kwh, respectively. ERC says the GRAM and ICERA rate adjustments will be effective March 26 to April 25, 2012 billing period and valid until the deferred accounting adjustment (DAA) amounts approved by the ERC will be fully recovered.

But Natera said that VECO’s next billing cycle will be on April 11 to May 10.

ERC Executive Director Francis Saturnino Juan in a press statement said that these fuel, purchased power, and foreign currency costs are legitimate costs already incurred by NPC and PSALM in their supply of power to their various customers and the law entitles them to recover these costs as part of the price of electricity they sell to their customers.

Juan added that ERC has already mitigated the impact of these adjustments by spreading the recovery over a longer period and by coming out with this decision at the soonest to avoid additional carrying charges to be included in the recoverable amount.  (FREEMAN)