Panelco III hit over P5.60/kWh increase
PROVINCIAL BOARD POISES SUIT
LINGAYEN—The Pangasinan III Electric Cooperative, Inc. (Panelco III) could be facing a court case over its recent decision to increase electricity rates, now the highest in the province.
During the Sangguniang Panlalawigan Question Hour last week where Panelco officials were invited to discuss the rate hike, 6th District Board Member Ranjit Ramos Shahani said he will call on the 150,000 consumers in the company’s service area to join him in filing a petition for a temporary restraining order (TRO) to stop the implementation of the increase.
“If we do not get justice here, we will get justice from the court of law. You are guilty of bad, bad, bad business practices,” Shahani said.
Shahani asserts that Panelco increased its rates by P5.6 per kilowatt hour (kWh), including value added tax (VAT) and other taxes, from P9.8 per kWh to P15.4 per kWh effective December 2013 without the required public consultation.
The board member described the company’s move as a “very, very, very, very wrong business decision”.
Lawyer Julius Cesar Peralta, chairman of the board of directors of Panelco III, who was accompanied by other company officials, explained that the decision to increase the rate, which he stressed was approved by the Energy Regulatory Commission (ERC), was brought about by the increase in generation cost in the wholesale electricity spot market (WESM) from which it sources the remaining 10 per cent of its power demand.
About 40 megawatts of its maximum daily load comes from the other power generator, GN Power Mariveles Coal Plant Ltd. Co., with whom it has a contract since October 2007.
“We, the board of directors, do not want the rate increase and we also get hurt because it is passed on to the consumers,” said Peralta, noting that Panelco paid its power suppliers in December 2013 about P276-million but it had a collection of only of P259-million.
“Panelco cannot shoulder the generation rate increase by WESM because it is too high, thus it is passed on to consumers , otherwise the electric cooperative would result in loans,” he added.
Shahani described the increase “a double whammy” for the consumers as not only Panelco III has passed on them the cost, but other businesses “will pass on the cost to consumers” as well.
Nonetheless, Peralta discouraged Shahani from pursuing the court case saying this could negatively affect consumers when the generation rates go down, as they normally do, by February or March.
He explained that if the TRO is granted and the court sets the power rate at its November price, then the company will not be able to bring prices down if the generation rates decrease in the next two months.
“It means consumers would not benefit because the February rate is lower than the November rate,” Peralta said.
SUAL OPTION
Meanwhile, 6th District Board Member Alfonso Bince Jr. suggested that Panelco study the possibility of sourcing its power supply from the Sual coal-fired power plant in Sual, Pangasinan, which offers cheaper price.
Peralta said in the event that the company undertakes public bidding again for its power source, Sual is welcome to participate and could be awarded the contract depending on the price offer.
Fifth District Board Member Danny Uy, for his part, said the people in eastern Pangasinan serviced by Panelco feel “short-changed” over what is happening now because they were promised lower power rates and irrigation supply once the San Roque Power Plant in San Manuel, Pangasinan is built.
“It (the power plant) is benefiting others from its low power rate while we pay higher electric costs,” Uy said.
The San Roque Power Plant and Sual power plant are both under the San Miguel Energy Corporation.
When Bince asked whether there is a possibility to refund consumers of their “overcharged” payments, Peralta replied, “The only way is if the ERC eventually says we overcharged.”
Panelco officials will return to the SP in this week’s session for a continuation of the inquiry.—Tita Roces and Johanne R. Macob
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