FICELCO to oppose NPC’s power rate hike
posted 23-Apr-2019  ·  
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Taking up the cudgels for consumers unrepresented in last week’s public hearing conducted by the Energy Regulatory Commission (ERC), the First Catanduanes Electric Cooperative, Inc. (FICELCO) has declared its opposition to a petition for a power rate increased filed by the National Power Corporation (NPC).In his manifestation during the April 11, 2019 hearing held at the BAPA Pavilion at the cooperative headquarters in Marinawa, Bato, FICELCO General Manager Engr. Raul Zafe said the proposed increase in the Subsidized Approved Generation Rate (SAGR) would not be in the interest of member-consumer-owners of the island, noting that the almost P3 per kilowatt-hour increase over a period of three years would defeat both the cooperative and NPC’s mission to deliver affordable energy to the people.

He urged the Commission, represented by hearing officer Atty. Katrina Jane Palacpac, to instead charge the amount to be recovered by the state power firm to the Universal Charge-Missionary Electrification (UCME).

According to an official source, the Board of Directors headed by President Rodulfo Vargas is set to pass a resolution stating their opposition to the NPC petition during their board meeting on April 26 and will likewise seek a similar measure from the Sangguniang Panlalawigan.

Among those present during the ERC hearing were NPC vice president Bienvenido Mabulac II and his party, the NPC Catanduanes operations staff headed by Engr. Ariel Beo, and FICELCO officials and employees.

The petition was actually filed on May 24, 2018, with the power firm praying for the issuance of a provisional authority to implement the proposed new SAGR in its Small Power Utilities Group (SPUG) areas primarily because of the higher tax on fuel from 2018 to 2020 under the Tax Reform for Acceleration and Inclusion (TRAIN) of the Duterte administration.

The existing SAGR is P5.6404/kwh but the figure appearing in the customers’ power bill is lower at P5.5514 due to the use of cheaper hydroelectric power this rainy season, a cooperative official explained.

“(An) increase in electricity prices is evident since NPC-SPUG uses diesel and bunker fuel in its power plants,” the state-run company stated. “(This) is tantamount to an increase in operating cost in the SPUG areas, effectively contributing to the increase of the Universal Charge for Missionary Electrification (UC-ME) which the main grid customers also pay along with the off-grid customers.”

For Luzon areas, including Catanduanes, the SAGR should increase by P0.9392 per kwh in 2018, P1.4609/kwh in 2019, and P1.9648 by 2020.

This does not include a potential increase of P0.9492/kwh which is being sought by NPC under a separate petition filed before the ERC in 2014 which has yet to be resolved.

Should the petition be granted, the SAGR for Luzon will go up by a total of P1.8884/kwh for 2018, P2.4101/kwh for 2019, and P2.9140/kwh for 2020.

This will result in effective power rates of P13.98 per kwh for 2018, P14.55/kwh for 2019 and P15.10/kwh for 2020.

Power bills would actually reflect a higher rate hike due to the 12% Value Added Tax (VAT) imposed by the Bureau of Internal Revenue (BIR) on the Generation, Systems Loss, and Distribution components of the power rate.

In asking the ERC for provisional authority, the NPC said that since the last level of SAGR approval was made in 2003, the fuel cost has risen by about 114% even without the TRAIN Law.

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