Senator Risa Hontiveros on Wednesday renewed her call for a suspension of any power rate hike until the Energy Regulatory Commission (ERC) has explained the continuous rise in electricity cost and the probe into rotational blackouts has been concluded.
Manila Electric Co. (Meralco) announced, for 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.
Hontiveros said there should be a halt on any additional charges
until there is a clear explanation from ERC on the increase in transmission charge which is being passed to consumers.
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.
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.
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.
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.
The opposition senator said he expects 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.
