Militants protest unjust power rate hike petition

By Michelle Zoleta and Arnell Ozaeta (The Philippine Star) Updated August 23, 2011 12:00 AM


MANILA, Philippines - The Bagong Alyansang Makabayan (Bayan) yesterday trooped to the Energy Regulatory Commission (ERC) office in Pasig City to protest the power rate hike petitions of the Power Sector Assets and Liabilities Management Corporation (PSALM).


The group called the petition for a rate increase unjust, as consumers will be forced to bear the costs of onerous contracts forged with independent power producers (IPPs).


According to Bayan, the ERC is hearing two separate petitions by PSALM to recover the stranded debts (SD) and stranded contract costs (SCC) of the National Power Corp. (Napocor) through a total rate hike of 39.79 centavos per kilowatt-hour (kwh).


The amount will be collected via the Universal Charge. If approved, households consuming 200 kwh a month will see their electricity bills rise by P79.58.


The Philippines already has the highest power rates in Asia, according to reports.


PSALM seeks to recover some P74 billion in stranded contract costs accumulated from 2007-2010, which translates into a 36-centavo rate hike. The state firm also wants to recover more than P65 billion in stranded debts.


Bayan said the SD and SCC arose from Napocor’s sweetheart deals with IPPs in the 1990s. It said that the “take or pay” contracts obliged government to pay for the plants’ capacity even when power is not produced or delivered.


It also noted that the government agreed to pay for the fuel requirements of the IPPs.


Such anomalous provisions, according to Bayan, caused the massive financial bleeding of Napocor, which was one of the main reasons used to justify its full privatization under the Electric Power Industry Reform Act (EPIRA) of 2001 or Republic Act (RA) 9136.


“But contrary to what was promised, EPIRA and privatization did not relieve Napocor of its huge debts. The massive debts remain and the people are being made to shoulder these debts,” said Renato Reyes, Bayan secretary general.


When EPIRA was enacted in 2001, the financial obligations of the state power firm were pegged at $16.39 billion. Last year, it was still $15.8 billion despite PSALM shelling out $18 billion in the past decade to pay Napocor’s debts and obligations with IPPs. EPIRA established PSALM to privatize and dispose of all the assets and liabilities of Napocor.


Under EPIRA, the financial obligations of Napocor that will not be liquidated through privatization shall be recovered from consumers through the SD and SCC.


“Power companies have long been squeezing the public dry with exorbitant rates. Even businesses are complaining. The ERC should not rush the approval of this new rate hike. It should not grant PSALM the provisional authority to raise the universal charge.”


Meanwhile, six other party-list groups demanded an investigation on the alleged questionable electric charges being passed on to consumers by electric cooperatives.