ERC urged to impose penalties on rate hike-causing GenCos

Published July 22, 2021, 1:57 PM

by Myrna M. Velasco

The Energy Regulatory Commission (ERC) is prodded to impose penalties against the generation companies (GenCos) that have caused unwarranted rate hikes during the power supply-strained summer months.

That has been the demand of several consumer groups, led by the Power for People Coalition (P4P), which trooped to the regulatory body’s office this week to jostle it into action so the industry players that committed market breaches in the problematic summer months would be punished.

To demonstrate ERC’s inequity and very slow action against the alleged erring GenCos, the advocacy groups brought with them magnifying glasses to symbolically “help ERC spot the anomalies — which the agency has not seen or acted upon — as households still affected by the Covid-19 pandemic struggled to pay their larger electricity bills.”

As previously reported, consumers served by the electric cooperatives had to bear the brunt of P1.00 to P3.00 per kilowatt hour (kWh) increases in their electric bills during summer; while customers of Manila Electric Company (Meralco) were also burdened by a rate hike last month, although at comparatively smaller scale.

P4P Convenor Gerry Arances stressed “the ERC seems to need help as they cannot see that these GenCos have consistently failed to live up to their contractual obligations.”

He cited earlier pronouncements coming from the ERC itself that at least 35 power plants of 17 GenCos have “exceeded the outage allowances in their contracts, and instead of being punished, they are rewarded with higher power rates which ordinary consumers have to pay.”

In several Congressional hearings, it was repeatedly sounded off that the spikes in power rates at the Wholesale Electricity Spot Market (WESM) and the more distressing rotating blackouts on May 31-June 1 this year had been due to the simultaneous shutdowns of electric generating facilities – many of which are unscheduled or forced outages.

But while that has been a recurring problem in the country’s power system since 2013 and several allegations of ‘market gaming’ had already been thrown against the power companies, the ERC still has not mustered any courage to penalize the culprits.

As stated by the consumer groups, they were able to document a total increase of P0.5876 per kWh from April to July 2021 – and they noted that such translated to an increase of P117.52 per month in the bills of consumers in the 200-kWh consumption band.

Given what is perceived as ‘inaction’ of the ERC, Leody De Guzman, chairman of the Bukluran ng Manggagawang Pilipino (BMP) raised these questions: “who should be punished? A worker who sets aside hard-earned money every month to pay his electricity bill, or the company which allows its plants to break down and not deliver on its contract?”

He further noted “apparently, the ERC thinks it’s the worker, because it has done nothing to alleviate the situation despite the overwhelming evidence that it is unfair to the consumer.”