02 JULY 2012
Iloilo City asks ERC to suspend power rate increase
The city government has asked the Energy Regulatory Commission (ERC) to suspend its order allowing a coal plant operator to collect an additional 32-centavo per kilowatt hour from consumers.
In an appeal filed at the ERC on Friday, the city legal office sought to stop the collection of P692.304 million in commissioning and testing costs of Panay Energy Development Corp. (PEDC).
The firm operates the 164-megawatt coal-fired power plant in La Paz District, which supplies most of the electricity to Panay Electric Co. (Peco), the city’s lone power distributor.
Protests have erupted from various sectors as many residents have been given assurance of cheap and stable power supply by proponents of the coal plant. The plant was opposed by church and environmental groups for health and environmental concerns but supported by city officials and business groups.
Business groups are also against the collection of additional charges, saying this would dampen investment and economic activity in the city.
Last month, the ERC approved the petition of the PEDC to collect the power increase for the next five years. The additional charge would cover the cost of testing and commissioning operations of its $104-million coal-fired plant from April to August last year before the ERC approved a 25-year Electric Power Purchase Agreement (Eppa) between PEDC and Peco.
Peco said it would collect the extra charge starting August if the ERC will not reverse its order.
Power rates in the city had already increased from P7.31 per kWh before ERC approved the Eppa in August last year to the current P12.13 per kWh charged by Peco to residential use and P11.60 per kWh for commercial use, according to Jose Junio Jacela, city legal officer.
Aside from stopping the latest increase, Jacela said the city was also urging the ERC to extend the period of collection of the P692.304 million in additional charges from five to seven years to cushion its impact on the monthly electric bill of consumers.
He pointed out that in the next five years, cost of energy production of the coal plant was expected to go down because of a significant increase in consumption due to the opening of more commercial establishments
Read article source in Philippine Daily Inquirer