Monday, February 28, 2005

NR0228: Junk EPIRA, stop selling Napocor SPUGS

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release February 28, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

Immediately Suspend implementation of EPIRA and privatization of energy sector even as call for scrapping of law gains ground - Rep. Beltran

Anakpawis Representative Crispin Beltran today said that even as lawmakers were calling for the review of the Energy Power Industry reform Act (EPIRA), the implementation of the EPIRA and the privatization of the energy sector slammed the Energy Regulatory Commission (ERC) anew for approving "left and right, one after the other" petitions of the National power Corporation (Napocor) and the Meralco."There are already calls to have the ERC abolished. It's nothing but a clearing room for the rate increases and other opportunistic demands of the Napocor, Meralco and the IPPs. As for the EPIRA, even without the congressional or senate investigations it's become patently clear to everyone especially to consumers that it's a destructive law," he said. He urged fellow legislators to co-author HB 2531, or the bill repealing EPIRA.

Late last week, the ERC gave the go signal to the rate hike application of the Napocor (NPC) in selected areas nationwide where the state firm's Small Power Utilities Group (SPUG) operates; as well as approving the Meralco's petition for increase - this time a in 9.29-centavo rate hike.

In Luzon, generation rates were adjusted by 21.09 centavos per kilowatt hour (kWh), an increase from P3.7064 per kWh to P3.9173. The adjusted rates will be implemented for two years. Rate increase in the Visayas is pegged at 30.06 centavos per kWh to be recovered in a three-year period. The new rate for Visayas will be P5.94 per kWh from the current rate of P5.64. In Mindanao, generation rates will go up by 11.42 centavos per kWh for six months. Prior to the ERC's approval, however, the NPC already implemented the adjusted rates last month. There are 14 identified missionary or unviable areas that are currently under the control and operation of the NPC-SPUG. The state firm wants the private sector to take over the operations in these areas.

Beltran reiterated his firm opposition to the privatization of the Napocor, and said that privatization will only open the gates to higher, more exploitative electricity rates for consumers all over the country. "The ERC and the Napocor are in complete cahoots to raise rates up to the roof to generate income for the latter and make it more appealing for potential buyers. Through all this, it's the consumers who suffer the consequences. They're holding the entire nation hostage to the rate hikes and the exorbitant rates," he said.

Energy Secretary Vincent Perez has said private-sector participation could take the form of a takeover of the supply of electricity to any existing NPC-SPUG areas, either through outright purchase or leas e of existing NPC-SPUG assets. The private sector could also install new power-generating facilities including associated power delivery systems.

In its order, the ERC said the rate increase would allow NPC-SPUG to recoup underrecoveries incurred under the deferred accounting adjustment (DAA) of the generation rate adjustment mechanism (Gram) for the period January to June 2004. DAA is a component of the total currency exchange rate adjustment intended to recover/refund the deferred currency exchange adjustment.

In the meantime, the ERC's approval for the Meralco's 9.29-centavo rate hike per kWh was also based on the so-called DAA. However, Meralco will implement the rate adjustment for two years, from February 2005 to January 2007. The ERC adopted in October last year a new set of guidelines replacing Gram to an automatic generation charge adjustment which will be done on a monthly basis. Gram was the new name of the purchase power adjustment, and it was previously implemented every three months. With a monthly adjustment in generation rates, distribution utilities, such as Meralco, will no longer need prior approval from the ERC and can adjust their prices monthly. #


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