Probe sought on looming rate hike

Consumer advocacy groups are asking power industry regulator, the Energy Regulatory Commission (ERC), to look into distribution utilities entering into power supply agreements (PSA) utilizing fossil fuels.

In a statement on Tuesday, the Power for People Coalition (P4P) warned that deals using conventional fuel pose a risk of translating to more expensive electricity for consumers.

To protect consumers from imminent bill shock, P4P said it filed a petition before the ERC to investigate the country’s largest distribution utility for initiating a bidding process that awarded contracts covering about 3 gigawatts (GW) to fossil fuel plants.

Power contracts terms

“The terms of these power contracts are unfavorable to consumers and small businesses. Everyone loses except big power players who are leaving consumers no choice but to pay for more expensive electricity while their profits are soaring,” P4P convenor Gerry Arances said.

“We are asking the ERC to reject these contracts as part of their responsibility of protecting the public,” he added.

The group pointed out that the contracts allow the plants to automatically pass on fuel costs to consumers, which is against the “least-cost” provision of the Electric Power Industry Reform Act (EPIRA).

Locked in

for 15 more years

If contracts get approved, consumers will be locked into 15 more years of high power prices, it added.

The local power industry is presently governed by the Electric Power Industry Reform Act or (EPIRA) passed during the time of former President Gloria Macapagal-Arroyo.

The EPIRA requires that the restructured electricity industry is assured of healthy competition through a level playing field in the competitive retail electricity markets, with oversight by the ERC and the Philippine Competition Commission. It also guarantees consumer choice and penalizes abuse of market power.