Consumers urge government to end power price hikes

Power consumers yesterday urged energy officials to put an end to impending power price increases due to the looming power crises in Cebu and Panay brought about by problems in contracts and negotiations between independent power producers and distributors

Members of Freedom from Debt Coalition chapters in Cebu and Iloilo and lead convenors of the KURYENTE Alliance-Visayas held a picket infront of the Integrated Bar of the Philippines social hall, where the Energy Regulatory Commission conducted a hearing on the problem of the power purchase agreement of the Panay Electric Company and the Panay Power Corporation.

Lito Vasquez, secretary general of FDC-Cebu said that they joined the picket to support consumers in Iloilo who will be affected by the problem.

Vasquez said consumers in Iloilo face the same problem as consumers in Cebu where Cebu Private Power Corporation threatened to shut down its operations due to failed negotiations on its contract with the Visayan Electric Company.

In the case of Iloilo, if the proposed amendment to PECO and PPC contract is approved by the ERC, PPC would be allowed to charge PECO by P3 per kilowatt hour more than National Power Corporation's average rate in the Cebu-Negros-Panay grid. At present, FDC said that NPC's rate is around P3.9465 per kwh, while PPC electricity price to PECO is P6.8 per kwh.

FDC is also asking ERC to explain why the hearing of the PECO-PPC case is being held in Cebu and not in Iloilo.

On November 26, 2005, CPPC also threatened to shut down after VECO refused to agree with the IPP's proposal to increase the rates of its power. Citing losses due to high taxes and implementation of the Electric Power Industry Reform Act, CPPC wants to increase its rates and amend the contract it has with VECO, which the latter opposed because it would mean higher electricity rates for its consumers.

At present, CPPC sells power to VECO at P6.9258 per kwh but VECO, in a civil case filed against CPPC, asked the court to order the latter to abide with its contractual obligations under their February 1997 PPA. The case is now pending at the Regional Trial Court.

Meanwhile, Vasquez said that from May to October 2005, the country's power rate is third highest in Asia, next to Cambodia and Japan, as based on the report by the Department of Energy. Philippines ranked fourth among selected countries in Asia in November 2004 to April 2005.

DOE said that the high cost of electricity in the country is due to continuing devaluation of the peso-dollar exchange rate, high dependency on imported energy and high cost of purchased power contracts.

"Consumers continue to shoulder the risks normally associated with any business endeavor, such as currency fluctuations and fuel cost. But more importantly, consumers continue to suffer the take-or-pay provision of contracts with independent power producers," Vasquez said. - Wenna A. Berondo