People's Domain

[Opinion] Perpetually chained to paying under-recoveries

We, the consumers of electricity in Iloilo City, were drawn by our brilliant local leaders to the sacrificial table in order to get butchered by the Panay Energy Development Corp. (PEDC) and the Panay Power Corp. (PPC) for 24-years. Yet these companies are being awarded by the City Government as top taxpayers.

On top of the colorless and odorless pollution being emitted by the “state of the art” circulating fluidized bed combustion engine of the coal plant, we are also paying the most expensive electricity at more than P12.00 per kilowatt-hour effective rate. The case of paying expensive electricity, however, is not temporary, but will stay or even go up within the contract period. The message is clear: the consumers are not anticipating any relief from expensive electricity.

The situation, however, is getting worse with more charges being asked by PEDC at the Energy Regulatory Commission (ERC) categorized as “under-recoveries”. The “under-recovery” is an additional charge which is aimed to collect amounts of money which were not collected or which the ERC failed factor in its computation before an order was issued.

Let me answer some frequently asked questions about the so-called “under-recoveries”.

Are we paying under-recoveries today?

Yes. In fact, we are being made to pay for two under-recoveries. The charge is ongoing and it is included in the generation charge.

We cannot, however, point out how much amount is being passed on to consumers or which amount covers under-recovery fee because all the charges are lumped together. We are not also guided as to how much electricity comes from PEDC (coal plant) and how much electricity comes from PPC (diesel plant).

This will be a subject of a separate petition which will be filed by the Freedom from Debt Coalition at the ERC in the coming days.

What under-recoveries we are paying and how much?

Don’t be shocked but the two under-recoveries that we are paying totals to an amount of more than P550-million. One of the under-recovery covering the period of August 2005 to December 2005 totals to 400,341,744.22.

The second one totals to P145,997,032,87.

How much is the cost of charge per kilowatt-hour and until when?

The first one is P0.2391/kWh which will end on November 2014. The other is P0.800/kWh and will end on September 2016.

Are we facing more under-recovery charges?

Yes. While the more than P550-million is being silently collected and which we pay on a monthly basis, a new under-recovery was approved by the ERC. The total amount is a whooping P692,304,298.58 representing under-recovery by PEDC from March 2011 to August 2011.

The new under-recovery solicited howls, opposition and condemnation from the Iloilo City Government yet city officials were powerless to stop the implementation of the ERC order to pass-on the charge to consumers starting September 2012.

But this is not the only under-recovery charge that we are facing in recent time, at the waiting room is another P55,087,348.86. So in totality we are facing P747-million of new under-recovery charges.

We may all ask the question of how can all these charges be stopped? It cannot be stopped because the ERC is inutile. It exercises its regulatory function in a manner favorable to IPP’s like PEDC and PPC and less protective of consumers’ interest. If we examine closer the impact of ERC work to the people, we can say that this institution failed the people. Its existence resulted to multiple rates increases since the Electric Power Industry Reform Act was enacted and with more to come in the coming days.

We can also least expect protection from our City Government. Instead of exercising its power and authority over power utilities or corporations doing business in its area like PEDC, PPC and Panay Electric Co.(PECO), the City Government instead kneeled down in front of PEDC and negotiate to lengthen the implementation period of the under-recovery in order to cushion the impact to consumers. This is like prolonging the pain. Preventing an over-burden to consumers is not what the City Government is capable of doing.

One thing is obvious, we have voted a leader at the city hall whose main capability is to enforce jaywalking ordinance and do some landscaping and beautification job.

One can also ask where now is Sen. Frank Drilon who recently joined in by opposing unjust rates increase in the guise of upholding consumer’s welfare. Sen. Drilon opposed the P600-million buy-out of PEDC sub-transmission assets by the National Grid Corp. (NGCP) but seems no show in the P747-million under-recovery charges?

We are just at the starting phase of having a coal plant in the city yet our electricity rate is way upward. The PEDC and PPC did not only expose us to health and environmental hazard because of its pollution, but more importantly, it chained the consumers to perpetually pay these under-recoveries.

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