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Betrayal of public trust; WESM hoax

opinion / Latest Opinion
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Betrayal of public trust; WESM hoax

/ 12:10 AM June 24, 2016

“EPIRA IS in fact working. But it can only be as effective as how well we enforce it to ensure sufficient competition in the industry, and how well we ensure that we have adequate power supplies, regular and reserve alike,” wrote Inquirer columnist Cielito Habito (“Epira is working,” Opinion, 6/17/16).

We cannot agree more with the observation. But while consumers are waiting for competition to reach the households or residential quarters—which, at the rate things are going, is likely to take many more years—there is need to ensure that the power rates for the captive electricity customers should in no way go up; they should go down instead, as the number of utility customers continues to increase.

In the logic of the principle of economies of scale, the increase in the customer base should reduce the per-kilowatt-hour cost of electricity.

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Unfortunately this is not happening because of the failure of the Energy Regulatory Commission (ERC) to conduct the required annual regulatory audit, which should, by law, be based on the rates it grants power utilities to ensure their viable operation.

The Epira or the Electric Power Industry Reform Act that Habito, the head of the National Economic and Development Authority during the Ramos presidency, referred to gives the ERC the distinct regulatory power to inspect the book of accounts of power utilities, a power we have not seen exercised since the passage of the Epira, although—thanks to the Supreme Court—the ERC has been reminded of this power.

Sad to say, it is this regulatory failure of the ERC that drives our power rates high. This runs contrary to the promise of Epira and, we regret to say this, such failure is, at best, a public service letdown, and, worst, a betrayal of the public trust.

Perhaps, our new ERC chair and CEO, Jose Vicente B. Salazar, can take a closer look at this ERC power and apply the same, to make sure that the country’s electricity rates are just and reasonable.

In support of the former Neda chief’s suggestion, and so that power rates for the contestable market become genuinely competitive, we propose a thorough review of the operation of the Wholesale Electricity Spot Market (WESM) by the Department of Energy and the Joint Congressional Power Commission. The review should look into and address a basic question on the minds of power consumers: Why power supplies contracted by distribution utilities, including electric cooperatives, which are already covered by ERC-granted regulated rates, are still traded by the generation companies at the spot market. Doesn’t this make a hoax of WESM at the expense of power consumers who pay for the cost of its operation?

—PETE L. ILAGAN, president, National Association of Electricity Consumers for Reforms

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TAGS: Electric Power Industry Reform Act, Electricity, Epira, letter, Letter to the Editor, opinion, Power
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