Power rates may go up by 12 centavos

MANILA, Philippines - Consumers will have to brace themselves for a new round of increase in electricity rates possibly in two months.         

Energy officials told the House energy committee yesterday that the cost of power for all users would go up by an average of 12 centavos per kilowatt-hour (kwh).         

This is the “premium” that consumers will pay for the next 20 years to investors in renewable energy (solar, wind, ocean, biomass, and water or hydro), Ernesto Pantangco, a member of the Renewable Energy Board, said.         

He said the people would have to shoulder the cost of investments in renewable energy.         

He said aside from recouping their investments from the additional 12 centavos that electricity users would have to pay, investors would be entitled to a 16 percent to 18.5 percent net profit.         

He added that the rates for solar, water, wind, biomass, and ocean energy have already been submitted to the Energy Regulatory Commission (ERC) for approval.         

Francis Juan, ERC executive director, told the energy committee that the commission is scheduled to approve the renewable energy rates before Aug. 31 this year.         

Members of the committee chaired by Batanes Rep. Henedina Abad expressed doubts on whether the people would accept a new round of increase in electricity rates.         

“The question is, can our people afford it?” Paraaque Rep. Roilo Golez asked.         

Eastern Samar Rep. Ben Evardone said the additional 12 centavos would be on top of pending rate adjustment petitions filed by the Power Sector Assets and Liabilities Management Corp. (PSALM).         

He said PSALM, the entity Congress created in 2001 to privatize the National Power Corp. (Napocor), is trying to recover nearly P800 billion in indebtedness that Napocor had incurred over the years.         

He said aside from Napocor loans, PSALM itself is mired in debt, which it wants to pass on to electricity users.         

“When ERC grants all these rate increases, we will dislodge Singapore and Japan as the countries with the highest electricity rates for household and commercial users,” he stressed.         

Such an eventuality could drive away investors and mean more difficulties for the people, he added.         

Former Pangasinan Rep. Mark Cojuangco, who attended the hearing, told the committee that renewable energy (RE) is much more expensive than energy officials claim.          

He said based on his study, RE rates could soar to as much as P50 per kwh, while the highest tariff recommended by the RE board is P17.95 for solar power.         

This means that the average 12-centavo net effect on the consumer could go up more than four times, he said.         

Definitely, the people cannot afford renewable energy, he added.         

Cojuangco has been batting for the rehabilitation and operation of the 600-megawatt Bataan nuclear power plant, which he said would reduce power cost by at least P2 per kwh.         

His wife Kimi, who succeeded him as representative of Pangasinan’s district, has re-filed his bill for the revival of the plant.