This is the statement/position of PHILRECA on House Resolution 2206 or Resolution Directing the Appropriate Committee to Conduct an Inquiry, in Aid of Legislation, on the Increase in Electricity Rates of Electric Cooperatives in Negros And Iloilo on the hearing conducted on October 12, 2021 at the House of Representatives on this Resolution. This statement is posted at http://web.philreca.org/statement-of-philreca-on-the-increases-in-electricity-rates-in-the-provinces-of-negros-and-iloilo/
PHILRECA, the association of 121 electric cooperatives operating nationwide, would like to express its support to House Resolution 2206, a legislative measure entitled, A Resolution Directing the Appropriate Committee to Conduct an Inquiry, in Aid of Legislation, on the Increase in Electricity Rates of Electric Cooperatives in Negros And Iloilo, as filed by Representatives Benitez, Alvarez (GM), Defensor (LR), Gorriceta, and Baronda.
First, we thank this Committee and the sponsors of House Resolution 2206 for bringing this issue to the public and hopefully, with this investigation, we will be able provide assistance to the electric cooperatives and its member-consumer-owners who have been victims of this unnecessary spike in electricity rates in the areas of Iloilo and Negros.
Indeed, there has been a series of spikes in electricity rates in Iloilo and Negros areas, not just those that are serviced by Electric Cooperatives but even those areas under a private distribution utility. All areas experienced rate hikes because the root cause of this problem is not from the distribution sector, but because there was an unfortunate incident in the transmission sector – the Cebu-Negros 138 kV Line 1 tripped on 15 June 2021, at around 9:28 AM, due to a damage caused by the DPWH on one of the lines of the Cebu-Negros Submarine Cable during the agency’s conduct of an amphibious dredging in Amlan, Negros Oriental.
This damage has contributed the following events:
- The damaged submarine cable of NGCP caused imbalances in the power requirement intended for Region VI electric cooperatives;
- Transmission of power supply from Cebu to nine (9) Negros and Panay–based ECs had also stopped;
- NGCP tapped expensive diesel plants to cover the load requirements;
- Power requirements had to be sourced out from WESM to avoid massive outages resulting to the spiraling cost of power;
- ECs had to incur higher markert prices in WESM due to unavailability of generators in Luzon (reason: preventive maintenance); and
- ECs were charged with high line rental amounts due to congestion.
Ultimately, all these increases in both the transmission and generation charges were reflected in the electric bills of consumers of CENECO, NONECO, NOCECO, and AKELCO, ANTECO, CAPELCO, GUIMELCO, ILECO I, ILECO II, ILECO III.
The Electric Cooperatives, being collectors of other charges had no control on the imposition of other fees. The only fees that the ECs have control of – the Distribution, Supply, and Metering or DSM Charges – remained unchanged, not just for the last few months but in the last few years and we intend to keep it that way.
Through the effort of the Electric Cooperatives Association of Region VI or ECAR 6, ERC responded to the appeal for market intervention on the high power rates in Region VI. The following were some of the decisions or actions by the Commission:
- Stop the collection from customers of all applicable charges until the damaged cable is restored;
- Refund the charges already billed, and
- Defer the payment of future charges until the transmission line is operational again or until more reasonable pricing or payment solution is ordered by the Commission.
What contributed to the spikes in electricity rates are all beyond the control of Electric Cooperatives; they are all pass-through charges that ECs are obligated to collect from consumers then remit to appropriate parties. ECs do not have the power to stop them from making these charges, hence, the prayer of ECAR 6 for the ERC to intervene – and they did.
What we are hoping right now is an assistance from the Committee on Energy to urge generation companies and the Independent Electricity Market Operator of the Philippines (IEMOP) though the Philippine Electricity Market Corporation (PEMC) to implement the order of the ERC so that necessary adjustments can be done by electric cooperatives on their billings.
Specifically, we hope that we can urge the IEMOP to implement in the soonest possible time the adjustment from June to August 2021 WESM bills so that electric cooperatives in Iloilo and Negros provinces – even the private distribution utility in the area – can implement the necessary refund of the amount to our Member-Consumer-Owners (MCOs) in their succeeding monthly bills.