OFW group calls for end to high power rates, inadequate supply

Published July 15, 2022, 6:26 PM

by Myrna M. Velasco

A group that is promoting the welfare of Overseas Filipino Workers (OFWs) is urging government to prioritize solutions on high electricity rates and the country’s dilemma of recurring tight power supply, that at times even result in rotational blackouts.

The Advocates and Keepers Organization of Overseas Filipino Workers (AKO-OFW) made that plea, as it also called on the power industry — primarily Manila Electric Company (Meralco) — to defer the pass-on of generation charges which accrued in 2013, as anchored on a recent ruling of the Supreme Court.

“AKO-OFW urged the government and the industry to work together to address the root cause of this high generation costs in the first place – inadequate power supply,” the group stressed.

AKO-OFW Chairman Chie Umandap claimed “these costs were due to lack of reliable generating capacity – as power plants especially aging ones are prone to unscheduled shutdowns,  due to varying reasons. He said this situation could have been averted if more power plants were built in the country.”

He added that “the solution is to prioritize energy investments. Building power plants take a minimum of three years, thus investment decisions must be made as soon as possible. Additional power generation supply is key in ensuring the government’s economic goals are achieved.”

A decision of the Supreme Court recently allowed the pass-on by Meralco of P22.64 billion worth of accumulated generation charges that will in turn be remitted to the power generation companies — including those that have been rapped with collusion allegations due to the simultaneous forced outages of their power plants, which aggravated supply tightness in the Luzon grid when the Malampaya gas production facility was on preventive maintenance in 2013.

Umandap stated “the high court’s decision finally puts a closure to this long-standing  issue that hounds not only power consumers but the entire power industry supply chain.”

To the ordinary consumers, that will entail at least P4.15 per kilowatt hour (kWh) increase in their electric bills, once the pass-on of charges by Meralco is finally allowed by the Energy Regulatory Commission.

The downside of that ruling though, as viewed by industry experts is that, the consumers’ pockets will be punished anew; while the power firms hurled with allegations of ‘collusive acts’ and market gaming at the Wholesale Electricity Spot Market (WESM) will be set free and would even be incentivized with billions of pesos, despite their failing service to the consumers.

Umandap asserted “it is unfortunate that this issue had to endure eight (8) long years before finally reaching a resolution.”

He qualified that if the SC decision had been rendered prior to the assault of the Covid-19 pandemic, “this would have been completed already.”

Umandap indicated that the pass-on of charges, despite unresolved allegations and discontinued investigation of market collusion by the ERC, “is fair to the consumers,” and he is just anchoring his argument on the regulatory imprimatur for staggered pass-on of the charges.

The 2013 simultaneous shutdowns of power plants had been classified as the power industry’s ‘perfect storm’ and that placed consumers at the losing end, because until now, they will need to bear the higher cost of power, despite being tormented with inadequate power supply caused by the forced shutdowns of the power facilities of the generation companies. (MMV)