Lower rates welcome but applications for fee hikes bear watching: consumer advocates

June 27, 2017 - 4:52 PM
ERC study rate hike petitions
Energy Regulatory Commission studies electricity rate hike petitions in May 2017. FILE SCREEN GRAB, NEWS5

MANILA – Consumer group CitizenWatch has hailed the orders of the Energy Regulatory Commission (ERC) that will cause electricity prices to go down for June, July and August, but called for vigilance on pending applications seeking to increase the fees charged on the monthly bill.

Last month, the ERC approved Meralco’s application to refund around P6.9 billion representing over-recovery for the generation, transmission charges for the period covering January 2014 to December 2016.

Also contributing to June’s rate decrease is the recent downward movement in the generation charge. The lower generation costs are due to improved dispatch of IPPs and PSAs and lower WESM charges. Generation charges account for more than half of consumers’ monthly bills.

CitizenWatch Secretary General Paco Pangalangan said, “The refund is a welcome development for ordinary Filipino consumers who survive from paycheck to paycheck, since these recent ERC orders will lead to a decrease of P285 in the electric bill of the typical household”

While praising ERC “for issuing this order and upholding the rights of ordinary consumers,” he said the consumer group trusts “that the ERC continues to uphold the rights of consumers in light of reports of pending applications seeking to increase the fees charged on our monthly bill.”

Among the petitions pending with the ERC is that of the National Transmission Corporation (TRANSCO) seeking to increase Feed-in-Tariff (FIT) rates by P0.10/kwh (from P0.12 to P0.22/kwh).

The National Grid Corporation of the Philippines has at least 15 pending petitions for rate increases to recover expenses arising from force majeure, particularly in the fixing of towers and lines damaged by typhoons, earthquakes and other natural calamities. (Visayas P0.19/kwh; Luzon P0.007/kwh; Mindanao P0.004/kwh).

National Power Corporation (NAPOCOR), on the other hand, has filed for a P0.07/kwh in the universal charge for missionary electrification in 2017.

“While the refund and lowering of generation costs are good news for the consumers, we fear the additional price increases, especially that of FIT, since it has shown a pattern of continuous increase over the years. If FIT and other fees continue to go up, it will negate the benefits immediately owed to consumers through the refund and price decrease and only further prejudice consumers in the long run.” Pangalangan added.