Co-ops question Napocor rate hike

published March 24, 2009 in BusinessWorld

TACLOBAN CITY — The 11 electric cooperatives operating in Eastern Visayas region yesterday questioned the rate increase granted to the National Power Corp. (Napocor), saying that it was not justified because most of the agency’s assets have already been privatized.

"With only 30% (privatization) more to go, there is no reason to increase the rate because majority of Napocor’s generation assets are already in the hands of private companies," said Gerry Gwen Conde, head of the association of the general managers of electric cooperatives in Eastern Visayas.

Mr. Conde, who is also the general manager of Leyte II Electric Cooperative, further questioned the lack of consultative meetings and public hearings before the increase was granted.

The Energy Regulatory Commission (ERC) held a public hearing on the adjustment only last week. But the rate increase was granted in February.

The electric cooperatives in Eastern Visayas, host of the Leyte geothermal fields, have started a signature campaign against the increase.

The Energy Regulatory Commission approved last month provisional increases in Napocor’s generation rates, as follows: P0.4682 per kilowatt-hour in Luzon; P1.15 per kilowatt-hour in the Visayas; and P0.7147 per kilowatt-hour in Mindanao. The adjustments will bring rates to P4.37 per kilowatt-hour in Luzon, P4.03 per kilowatt-hour in the Visayas, and P2.82 per kilowatt-hour in the Mindanao grid effective the billing period from February 26 to March 25.

The commission said it granted provisional relief to Napocor and its co-applicant, the Power Sector Assets and Liabilities Management Corporation, to immediately alleviate Napocor’s current financial difficulties, given its current costs of generating power, including the costs of the discounts that it is mandated to extend to certain customers.- Sarwell Q. Meniano