ERC’s deafening silence on power rates increase

This is a reaction to the article “Meralco to raise power rates” (News, 6/11/22).

The reason cited was the increase in generation charges, which are passed on costs from the power generators, e.g., Quezon Power, (FGPC)-Sta. Rita, (FGP)-San Lorenzo, FNPC, SBPL, AC Energy, SMEC, SPPC, etc. In other words, Meralco was speaking as a mouthpiece of the power generators, whose role in the electric power industry is largely ignored.

These power generators have power supply agreements (PSAs) with electricity distributors such as Meralco and each and every PSA is subject to prior review and approval of the Energy Regulatory Commission (ERC).

The ERC bears major responsibility for its laxity in the regulation of power generators — for its failure to put safeguards in the PSAs to protect the consumers against runaway electricity charges, which we are now experiencing.

The announcement of Meralco explains very well that it has numerous power suppliers with different sources of power such as coal, natural gas, hydroelectric power, geothermal, solar power, diesel, etc., and the reasons that brought about the said increase of P0.33 per kWh. A cursory look at my monthly bill for May and June 2022 shows a generation charge of P6.2277 per kWh and P6.5590 per kWh, respectively. This validates the P0.33/kWh Meralco rate increase. Each of these suppliers has their own separate PSA with different rates and periods of time determined, fixed, and set by the ERC, the protector of the electricity consumers.

Meralco said that the charges from independent power producers (IPPs) and PSAs increased by P0.6083 and P0.0859 per kWh, respectively, “mainly due to higher fuel costs.”

While the ERC promulgated rules allowing monthly automatic adjustments in the generation and transmission charges which extend to the monthly system loss charge, consumers expect a plausible explanation more from the generation company and ERC than from Meralco that should even be the one questioning this rate increase.

It must be emphasized that Meralco is the sole buyer of electricity for its trusting captive customers rendering it the status of a “de facto” representative. Thus, for Meralco to make the announcement of a rate increase in its generation charge reduces its status from that of a captive customers’ representative to a spokesperson and protector of its power suppliers and this can be taken as tantamount to a betrayal of trust.

The deafening silence of ERC is very disturbing if not alarming as this invites a compelling and strong impression of a regulatory failure that adversely affects the interest of the electricity consumers it is mandated to protect. With these rate increases, we may now be categorized as the country with the highest electricity rate in Asia.

PETE L. ILAGAN
President
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