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CONGRESS
would need to fast-track key amendments to the existing
Electric Power Industry Reform Act (Epira) in order to
reduce the rates of electricity and cushion the impact
of spiraling prices of food and fuel. This was one of
the key points raised at Monday’s marathon hearing of
the Joint Congressional Power Commission (JCPC).
“Our
country is second only to
Japan
when it comes to high electricity rates in Asia. But
compared to Japan, the Filipinos’ income and purchasing
power is low. Families’ budgets are stretched to
accommodate rising prices of food, fuel, and now,
electricity,” said Sen. Edgardo Angara at the hearing.
“Currently, consumers continue to pay for onerous
contracts and inefficiencies of power producers,
aggravating the hardship of Filipinos. Instead of
spending more hard-earned pesos for food and other basic
commodities, the money goes to paying for electricity.”
According to him, “the root cause behind our high
electricity rates are onerous provisions in the Epira,
which recognizes and allows the Purchase Power
Adjustment (PPA) to be passed on to consumers, even
hiding it through the imposition of ‘universal charge’
to replace the PPA. This means that consumers are still
burdened with paying an automatic monthly adjustment to
basic electric bills to recover the changes in the cost
of power purchased from private producers in the form of
PPA.”
Angara
added that the PPA is broad enough to allow power
generators and distributors to pass on to consumers the
cost of its mistakes and inefficiencies as well as the
burden of the onerous contracts entered into by the
Napocor and distribution utilities with independent
power producers (IPPs). “This should not be the case.
Consumers should be required to pay only for their
electricity consumption. The risks should be, as in any
business venture, accounted for by producers.”
Under
the amending bill filed by
Angara to bring down electricity rates, distribution utilities will
be required to refinance their stranded costs, or
investments made to facilitate the transition from a
fully-regulated market to a competitive one. At the same
time, he said, it places a cap on stranded cost recovery
at a maximum of P0.23/kWh between 15 and 25 years. This
amount shall be determined by the Electricity Regulatory
Board.
The
Angara bill also mandates an arms-length review and
renegotiation of all IPP contracts, the benefits from
the renegotiation directly translating the lower PPA and
stranded cost charges to the end-users by an
international panel of experts.
The bill
likewise limits the PPA charged by distribution
utilities to 23 centavos. It exempts from PPA the
end-users consuming less than 100 kWh a month, and gives
a 50-percent discount on PPA or universal charge for
end-users consuming 100 kWh to less than 300kWh a
month. |
