Power users in Visayas to face huge rate hikes

Business Mirror
Wednesday, 18 March 2009 22:56

POWER consumers in the Visayas, including Metro Cebu, can expect to get the biggest hike yet in their bills as distribution utilities start to pass on, starting this month, the provisional increase in the generation rates of the National Power Corp. (Napocor)

The Visayan Electric Co. (Veco) announced on Tuesday its close to 300,000 consumers will receive an average of around P1 increase per kilowatt-hour starting in their April electric bill.

Arlo Garcia Sarmiento, assistant vice president for utility economics, said they have no choice but to pass on to consumers the Napocor rate increase. “This is a purely generation- rate increase.”

The Energy Regulatory Commission (ERC) on February 16 provisionally approved the adjustments sought by Napocor and Power Sector Assets and Liabilities Management Corp. (PSALM) “to immediately alleviate NPC’s current financial difficulties given its current costs of generating power, including discounts that it is mandated to extend to certain customers.”

The ERC approved a P0.4682 increase for Napocor generation rates in Luzon, P1.1460 in the Visayas and P0.7147 in Mindanao per kilowatt-hour spread across every hour of its existing time-of-use-based rates. The ERC has one year to decide with finality on the petition.

“Since the increase is only provisional, the hearings will continue and Veco will observe the proceedings,” added Sarmiento. “The increase should be justified by the supply company. We want to ensure the increase is fair to protect the interest of our consumers.”

Since Veco only gets around 75 percent of its power supply from Napocor, the actual average increase for all its consumer categories will only be around P0.936 per kWh.

For an average household consuming 175 kwh per month, the bill will see a P199 increase to around P1,326 a month, according to Veco.

Veco’s new average generation rates will be P4.2779, still lower than Meralco’s preincrease generation rate of P4.4750, Veco noted. The company is jointly controlled by listed companies Aboitiz Power Corp. and the Vivant Corp. of the Aboitiz and Garcia families of Cebu.

Sarmiento said the rates will not affect its buying rates from its independent power suppliers, the biggest of which is Cebu Private Power Corp. (CPPC). He said its contract with CPPC is no longer pegged on the Napocor rates, and thus will not be affected by the provisionally approved Napocor generation rate hike.

At the hearing of the Napocor petition in Cebu City on Wednesday, members of the Freedom from Debt Coalition (FDC) held a protest asking the regulatory body to junk the petition.

Lito Vasquez, secretary-general of FDC Cebu, said officers from its chapters in Eastern Visayas, Negros and Iloilo will come to Cebu to join the protest and express their opposition to the rates increase.

He said Gov. Ben Evardone of Eastern Samar and Gov. Sally Perez of Antique have already expressed opposition to the increase. The Sangguniang Panlalawigan of Negros Occidental, likewise, passed a resolution opposing the increase.

“The NPC is raking in billions from its present rates yet it demands billions more in the middle of a raging worldwide crisis,” added Vasquez in his statement.