Rate hike awaits VECO consumers

CEBU, Philippines - An increase of P0.0592 per kilowatt hour awaits consumers of Visayan Electric Company once the Energy Regulatory Commission approves a petition filed by the power distributor in September last year.

Once the increase is implemented, a household consuming 100 kilowatt hour per month of electricity would have an incremental cost of P5 per month.

“However, VECO will collect the increase of five cents per kilowatt hour for a period of three months only,” said Lyndon Jayme, VECO assistant vice president for Utility and Economics Department.

VECO clarified in a press conference yesterday that although it filed two petitions before the ERC, only one was to recognize the additional capital expenditure for repair and reinstallation of the 100 MVA transformer (TR4).

Jayme said the second petition was filed as a matter of procedure among distribution utilities.

He said the rate hike petition is not for repair or installation of the transformer.

Sebastian Lacson, VECO senior vice president and chief operating officer, said the rate increase was meant to recover the P34.2 million they advanced to purchase power from the East Asia Utilities Corporation for the period from May to July in 2012.

Lacson said they have no other choice but to purchase power from EAUC to avert an eight-hour brownout within their franchise area.

“If we did not purchase power from them, our franchise area could have a rotational brownout for three months from 10 a.m. to 6 p.m. But because of what we did, nobody hardly notice that our 100 MVA transformer is down,” said Lacson.

The 100 MVA transformer, located at the vicinity of the National Grid Power Corporation in Banilad, Cebu City, got burned when it was hit by a lightning on May 27, 2012.

As a result, five substations (Cabancalan, Banilad, Waterfront, Ayala and Camputhaw), all major load centers in the central area of VECO’s franchise, were affected.

In order not to burden the power consumers, VECO decided to purchase power from EAUC, although at a higher cost of at least P10 per kWh compared to other supply from coal-fired power plants.

Lacson said that only East Asia at that time can provide them with the much-needed power.

“A 100 MVA can supply even up to siguro mga 15 SM Malls. Ing-ana ka dako ang nawala sa among system. So, we have to purchase that power,” Lacson explained.

Valentin Saludes III, VECO vice president for engineering, said that repair of the 30-year-old transformer, which has a current value of P80 million, is ongoing. It will be back online next month.

After VECO’s three-month contract with East Asia, it was able to rent another transformer from NGCP which it is now using.

The transformer will be returned to NGCP once the repair is completed, Saludes said. -/LPM (FREEMAN)