After PPA, here comes Gram

First it was the purchased power adjustment (PPA). Now it’s the Generation Rate Adjustment Mechanism (GRAM).

A militant group warned consumers yesterday that electricity rates would shoot up again soon.

According to the Bagong Alyansang Makabayan (Bayan), the Energy Regulatory Commission approved a new cost-recovery mechanism called GRAM that will replace the PPA. The ERC order which was released last week took effect immediately.

Bayan said the new PPA is hardly a solution to the worsening problem of high electricity rates.

"The new scheme will simply defer the collection of the PPA. Instead of monthly collections, distributors and generation companies will collect on a quarterly basis," said Bayan spokesman Renato Reyes Jr.

"There is nothing in the scheme which says that electricity rates will go down. We will still be paying the same, this time even higher," he added.

Reyes said the ERC order will allow the National Power Corp. (Napocor) to resume the collection of its PPA which was suspended last year by President Arroyo.

According to Bayan, the ERC order effectively negates the 80-centavo PPA reduction as reflected on monthly billings last year. This will automatically translate into higher electricity rates. – Romel Bagares