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PCCI petitions ERC to halt rate hikes

03/16/2009

The country’s main trade group, the Philippine Chamber of Commerce and Industry (PCCI), has asked the Energy Regulatory Commission (ERC) to suspend the nationwide power rate hike it recently granted to two state power companies.

PCCI sought to stop implementation of the ERC decision issued last Feb. 17 approving a 46 centavos per kilowatthour rise in power rates in Luzon, P1.14 per kwh in the Visayas and 71 centavos per kwh in Mindanao.

If not suspended, consumers in Luzon will be paying a base rate of P4.36 per kwh or a household rate averaging P11 to P12 per kwh. The basic rate in the Visayas will go up to P4.03 and in Mindanao, P2.81.

The electricity rate increases will reflect in the Feb. 26 to March 25 billing period of the government-owned National Power Corp. (Napocor) and the Power Sector Assets and Liabilities Management (Psalm).

The PCCI petition for the order’s suspension was signed by Robert Calimlim, member of the energy committee of the PCCI on behalf of the largest business organization in the Philippines with chapters in practically all provinces and cities nationwide.

PCCI said Napocor and Psalm had not proven the urgency of increasing electricity rates in the country, timed as it is when everybody is reeling under a global economic meltdown. So, it must be deferred, Calimlim stressed.

PCCI further expressed fears that the rate hike may trigger off inflation as the generation rate makes up 40 percent of what every consumer pays every month. It may have a domino effect on prices of basic goods.

PCCI also questioned the arguments of the state companies that power rate increases are the solutions to heavy losses they incurred last year. It pointed out that the claim of NPC that it lost to the depreciation of the peso last year was unfounded since the peso largely appreciated during the year.

The petitioners for rate hikes, PCCI pointed out, failed to prove that their losses were not the result of mismanagement and mishandling of purchases of fuel like coal at a time under a regime of wild price fluctuations in coal prices.

PCCI has been at the forefront of the advocacy for lower power rates for more than a decade and threw its full support to the Electric Power Industry Reform Act (Epira) passed into law in 200l.

The chamber has argued that high electricity rates in the Philippines has jacked up the prices of Philippine goods and undermined their competitiveness in the domestic and foreign markets.

Instead of going down following Epira’s enactment into law, electricity rates kept on increasing to a point that with the most recent rate increases, the Philippines may now overtake Japan as having the highest electricity rates in Asia.

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