VECO asked to shed light on overcharging

CEBU, Philippines - The Cebu City Council has invited the Visayan Electric Company, Power Sector Assets and Liabilities Management and the Energy Regulatory Commission in a public hearing on May 14so that they will explain possible under or overcharging of power consumption.

In a privilege speech, Cebu City Councilor Nestor Archival also requested VECO to review their financial statements so as to ensure that accurate charges are reflected and to refund the consumers in case there is overcharging.

Archival said the City Council also wants to be apprised on the possible double transmission charging made by WESM and PSALM.

He said the inquiry is need so as to ensure that “only correct computation of rates is charged to the consumers.”

Archival said his request stemmed from the ERC’s discovery on“double charging in transmission line costs” by PSALM to Meralco last March 10, 2010 which forced Meralco to refund its consumers at least P10 billion worth of transmission line costs that were overcharged by the government-run PSALM/NPC since 2006.

Archival, who heads the City Council Committee on Energy, pointed out that VECO as well experienced such double charging, stressing that the company should repay its consumers.

“VECO which is similarly capacitated with Meralco should give an accounting from the start of its collection of the various under/over recoveries in their pass-through charges, and to refund the same if there is anything to refund to the consumers within their franchise area,” he said.

However, Archival said refund is not limited to generation charge, transmission charge, system loss charge, ICERA, subsidy on lifeline charge, senior citizen subsidy rate, missionary electrification, environment charge, and NPC stranded contract costs, among others.

“In view of these refunds by PSALM/NPC to MERALCO customers, customers in the Visayas, should realize that our local distribution utility which is VECO suffered the same double charging by PSALM on transmission loss since, PSLAM is obliged to follow their Transition Supply Contracts with Visayas-customers (including VECO) which is to include in its computation the standard 3.67% transmission loss, while the PEMC is also bound to follow its Price Determination Methodology in the WESM to apply the equivalent transmission loss, hence, the reason for double charging,” Archival said in his speech.

Councilor Gerardo Carillo, a lawyer, said the ERC may not compel VECO to refund the excess charges considering that no petition filed before the said commission.

Carillo, on the other hand, is encouraging any consumer groups “to initiate or study a petition to be filed before ERC to compel VECO to refund.”

To avoid overcharging, Archival pointed out that there must be a regulator to conduct post-audit activity to put effective control and regulation on the players in the power industry.

This will also avoid collusion between power generators, he said.

In a separate development, the City Council is requesting the DOE to enlighten them as to the results of their consultative meeting for the amendment of the Electric Power Industry Reform Act of 2001.

EPIRA is a reform law whose objective is to break up the monopolistic nature of the power industry and protect the consumers from the soaring price of electricity.

Reportedly, more than a decade following the passage of the law, the Philippines has the highest electricity rate in Asia, which Cebu ranked number four with 0.19 US dollars of P8.55 per kilo watt per hour.

“But instead of reforming to improve the delivery of supply and lower the rates for the consumers as it was envisioned for, it has become a contradiction to its purpose,” Archival said. — (FREEMAN)