Iloilo traders hit additional charge for coal plant cost recovery

ILOILO CITY—A business group in Iloilo has criticized an order of the Energy Regulatory Commission (ERC) that allows a coal plant operator to charge an additional 32 centavos per kilowatt hour to recover P692.304 million in commissioning and testing costs.

The Iloilo chapter of the Philippine Chamber of Commerce and Industry (PCCI) said the additional charge is an added burden to consumers who have to pay one of the highest electricity rates in the country.

Joe Marie Agriam, PCCI-Iloilo president, said imposing higher electricity rate is “antiprogress” especially when officials and business groups are promoting the city and province of Iloilo as an investment destination.

“This deters our move to make Iloilo attractive to investors and unwittingly will push investors toward neighboring cities which have lower electricity rates,” Agriam said.

The ERC in an order issued on Dec. 26, 2011 and released on June 1, granted the petition of the Panay Energy Development Corp. (PEDC) to collect P692.304 million in five years as part of uncollected expenses during its testing and commissioning stages from April to August last year.

The PEDC operates the $104-million 164-megawatts coal-fired power plant in La Paz District here. The coal plant supplies the bulk of the electricity to the Panay Electric Co. (Peco), the city’s lone power distributor.

Agriam said consumers should not shoulder these expenses.

“PEDC enjoys a tax holiday for five years as mandated by the (Board of Investments) so an increase for reason of recovering investment done during commissioning stage connotes greed at the public’s expense,” he said.

The PEDC has said that it was not increasing its rates but recovering expenses not covered by provisional rates implemented before the ERC approved its Electricity Power Purchase Agreement with Peco.

The city government will also appeal the ERC ruling.