New Rates Increases to
Haunt Power Consumers
Power consumers
face new power rates increases this year. For power consumers, there is no
relief from the spate of rate hikes they had to put up with last year, for
that matter, for decades.
BY ALEXANDER MARTIN REMOLLINO
Bulatlat
After greetings of
“Happy new year!” have faded, power consumers have to brace for something
to be unhappy about for 2005. They are to face new power rates increases
this year. There seems to be no relief, then, for power consumers from the
spate of rate hikes they had to put up with last year.
President Gloria
Macapagal-Arroyo, campaigning for election from February to May last year,
promised she would make Philippine power rates the lowest in Asia. But
power consumers had to kiss that promise goodbye as they had to bear rates
increases starting July.
And now they have to
brace for more.
Napocor petition
For one, the petition
of the National Power Corporation (Napocor) for a P1.87 ($0.0333 based on
a $1:P56 exchange rate)/kilowatt hour (kwh) increase in its generation
charge seems on its way to approval.
Engr. Ramon Ramirez,
convenor of the broad-based People Opposed to Warrantless Rates Increases
(POWER) told Bulatlat in an interview Jan. 7 that the Energy
Regulatory Commission (ERC) will approve Napocor’s request when it
convenes Jan. 10.
Earlier in mid-2004,
Napocor filed a petition for a P1.87/kwh in mid-2004. The ERC approved a
P0.98/kwh increase in the generation charge last September.
The other half of the
petition is still being deliberated on at the ERC, but as early as last
December there were already telling signs.
Early that month
Scholastica Cororaton, head of the policy and planning division of the
National Economic and Development Authority (NEDA), told reporters that
consumers should patiently bear with an additional power rate increase in
early 2005.
“The impact of high
inflation is only short-term,” she had said. “But looking at the long
term, we have to solve the fiscal problem because it is through it that we
can attract investments and help the economy grow.”
In a recent e-mail to
Bulatlat, Ramirez interpreted this as meaning that “ERC got its
marching orders to approve the other half of (the Napocor) petition.”
Ramirez also noted
that when the ERC approved the provisional increase last September,
Macapagal-Arroyo said it was only a step to reflect the true cost of
power. But, he continued, “it is now all about solving the fiscal crisis
and attracting investments.”
Power consumers may
then expect an increase of P0.87/kwh in their power rates come February.
This means a power consumer who uses an average of 279 kwh and paid P2,182
for Dec. 3, 2004-Jan. 4, 2005 will be paying an additional P244.96 in
February.
As it is power
consumers are also mostly battling with the high cost of living unmatched
by low wages.
Based on data from
the National Wages and Productivity Commission (NWPC), the daily cost of
living for a family of six – the average Filipino family – is no less than
P560. In the National Capital Region (NCR), the daily cost of living is
already P594 for a family of six, while the minimum wage is pegged at
P300.
TRAM, etc.
As if these were not
enough, power consumers have to prepare for the eventual imposition of the
Transition Rate Adjustment Mechanism (TRAM). It is not yet known how much
the TRAM will bloat power bills, as the ERC is still preparing guidelines.
Ramirez describes the
TRAM as “another device to let consumers pay for additional transmission
costs.”
“The essence,”
Ramirez added, “is that all changes in expenses are passed on to
consumers. In other words, all business risks are borne by the consumers.”
Ramirez said that
with this the people might as well take over the utilities.
An out-of-school
youth queried by Bulatlat on this expressed a similar view. “If the
power consumers are to be made to shoulder the business risks,” he said,
“they might as well be made to operate the power firms.”
“In the first place
(the utilities) should be publicly owned,” Ramirez further said.
Also, by October, the
inter-class cross-subsidy will be removed, which will effectively increase
power rates by P0.4278/kwh. So by October, a power consumer who uses an
average of 279 kwh will be paying P119.36 more.
Meanwhile, new items
have started to appear on the electric bill: the Napocor stranded debts,
the Napocor stranded contract costs, the distribution utilities stranded
contract costs, and the equalization taxes and royalties. As of now they
each amount to P0.00 in the electric bills, but they will likely increase
power rates in the next few months. Bulatlat
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