No to power rate hike until a clear and justifiable investigation is completed – Hontiveros

MANILA – (August 11, 2021) – Senator Risa Hontiveros on Wednesday renewed her call to suspend any power rate hike until the Energy Regulatory Commission (ERC) has provided a clear explanation of a continued rising cost of electricity and the investigation on rotational blackouts has concluded.

The statement comes as Manila Electric Co. (Meralco) announced, on the 5th straight month, that its August rate will increase by P0.0965/kWh. This is equivalent to P19.00 for households that consume at least 200 kWh per month.

“Dapat ipatigil muna ang anumang dagdag-singil sa kuryente hangga’t walang klarong paliwanag ang ERC kung bakit patuloy na tumataas ang transmission charge na ipinapasa sa konsyumer,” Hontiveros said.

“Hindi biro ang limang buwang sunud-sunod na taas-singil. Bawat piso ay mahalaga ngayon lalo pa’t marami na naman ang hindi makapaghanapbuhay dahil sa panibagong lockdown, ” she added.

The higher transmission charges this month were due to higher ancillary services (AS) which jumped from P0.5992/kWh in July to P0.7323 this month, according to Meralco.

The Senator recalled that, except for NGCP, agencies and other stakeholders have impressed upon the Senate that no upward movement in transmission charges was going to happen once AS is made firm from non-firm.

“Ang malaking tanong na dapat sagutin ng ERC at Department of Energy (DOE) ay permissible ba ang pagtaas na ito? During the Senate investigation, these agencies left us with an assurance that there will be no increase in transmission charges even if non-firm contracts of National Grid Corporation of the Philippines’ ancillary services were converted to firm contracts. Lip service lang ba ito?,” Hontiveros asked.

“Kung walang malinaw na paliwanag tungkol dito, makabubuting ipatigil muna ito para sa kapakanan ng ating mga konsyumer na umaasa sa magandang ibinunga ng naturang pagdinig,” said Hontiveros.

“In fact, may nagsabi pa nga from among the players na possible pang bumaba ang charges na ito once firm AS is auctioned to the market,” said Hontiveros.

The AS has become the central issue during the Senate inquiry into the power outages that occurred during the first week of June. Other than the AS, also discussed during the previous hearings was the possibility of a further reduction in transmission cost once NGCP’s 15% Weighted Average Cost of Capital (WACC) is brought down to an appropriate level, an issue pressed strongly by Hontiveros since last year.

A preliminary study indicated that reducing NGCPs WACC to either 12%, 8%, or 6.84% will bring down transmission charges by at least 10% or by at least P0.10/kWh. A reduction will also happen when the same is applied to Meralco’s WACC.

“Sinabi ng ERC sa pagdinig na under review at possible nang ibaba ang WACC ng NGCP at Meralco na lubhang napakataas sa parehong 15%. Kung kaya’t para sa akin ang galaw dapat ng presyo sa transmission at distribution charges ay pababa at hindi pataas kung makatwiran na kilalanin at aksyunan ito ng ERC lalo na ang pagtanggal sa maanomalyang pagpapatong ng advertisement, public relations at entertainment costs mula sa sinisingil sa atin sa transmission charges, she added.

Last month, Hontiveros also urged the ERC to suspend the rules on Automatic Generation Rate Adjustment (AGRA) and temporarily defer the rate increase for distribution and transmission charges that continue to burden the consumers.

“Ilang beses na nating ipinanawagan ito. It’s frustrating that our calls seem to be falling on deaf ears. Kapabayaan ba ito o pagbibingi-bingihan sa totoong kalagayan ng ating konsyumer? I am expecting ERC to diligently exercise its regulatory functions to the fullest and ensure that consumer welfare is protected and power rate and service are justly regulated without further delays especially in bringing down the price of our electricity. If not, then they should voluntarily resign from their posts,” Hontiveros concluded. ###