Electric coops, consumer groups explain issues behind power hikes

For Immediate Release
2 September 2022

Electric coops, consumer groups explain issues behind power hikes; open to legislative inquiry to amend EPIRA
Addressing concerns raised by legislators on the continuing power hikes, AMRECO (Association of Mindanao Electric Cooperatives) organized a press conference with electric cooperative groups and consumer groups as resource people yesterday, 31 August 2022, Cagayan de Oro City.
Atty. Janeene Depay-Colingan, executive director and general manager of PHILRECA, the national association of electric cooperatives in the country, explained that electric cooperatives have been “maligned, crucified, and even tried in the court of public opinion” for collecting increasing rates of electricity.
“The ECs may be the collectors or collecting agents of the payments due to generation companies, the transmission systems operator, and even the taxes due to the government, but I assure you that we never benefit from any increases in electricity rates,” clarified Colingan.
She also added that “when you pay your bills, the only amount that goes to the electric cooperatives is the one reflected in the distribution-supply-metering (or DSM) charges. This amount is fixed by law, regulated, and can only increase or decrease after public consultation and deliberation, as well as approval by the ERC.”
Colingan also provided a chart showing different components of a consumer’s electric bill and where the bulk of the payments go: 61% to generation charge, 7% to transmission charge, 18% to taxes, subsidies, and other charges, and with only 14% going to distribution charge.
She highlighted that “the DSM rate [distribution charges] never changed before and during the pandemic, not in the last 10 years or since 2010! Inuulit ko po, hindi nagbago ang DSM rate – ang halaga na naka-karga sa inyong mga billing statement na napupunta sa mga electric cooperatives – since 2010! Kung may pagtaas po ng presyo ng kuryente, iyan ay dahil sa pagtaas ng ibang components tulad ng generation charge.”
On the side of the consumers, PHABDREC (Philippine Association of Board of Directors of Electric Cooperatives) President Atty. Gloria Corrales said that electric cooperatives have Board of Directors elected by the member-consumer-owners to protect their welfare and interests, in the same way that we elect our legislators who pass laws for the welfare of the Filipinos.
“As representatives of the member-consumer-owners, the Board of Directors certainly do not want to be burdened with higher electricity prices. We will not agree to any Power Supply Agreements that will be detrimental to the welfare of the people that we serve,” said Corrales.
Power Supply Agreements are the contracts entered into by electric cooperatives and their power supplier (generation companies) in the provision of electricity that the ECs will eventually distribute to the consumers. Such PSAs are a result of deliberations and consultations and are approved by the Energy Regulatory Commission or ERC. PSA contains provisions on payment terms, rates, allowable adjustments, and others.
Corrales said that “back when some PSAs were approved, the cheapest and more affordable sources of power is coal and we have enjoyed this for years!”
“But things happened, international conflicts erupted, exportation of coal was banned in certain countries, supply was immensely reduced, and these factors affected the cost of generating electricity,” explained Corrales.
She further explained that “the Electric Power Industry Reform Act or EPIRA allows certain costs incurred by generation companies to be passed on to consumers and this is what makes electricity cost higher.”
Both PHIRECA and PHABDREC expressed their support for legislators’ call for an inquiry so that necessary amendments to the EPIRA – which they hope will lessen the cost of electricity to be paid by consumers – can be implemented.
They appealed, however, that the legislators look not only into the distribution sector but the entire power supply chain including and especially the generation and transmission sectors, as well as the taxes being collected by the government on these components.
The conference was also participated in by leaders of other consumer groups as well as APEC Party-List Representative Sergio Dagooc who laid down their legislative agenda on how the power crisis can hopefully be addressed.
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