P1.55/kWh power rate hike seen in supply deals

By: - Reporter / @JeromeAningINQ
/ 06:10 AM May 27, 2018

A P1.55-per-kilowatt-hour (kWh) increase in electricity rates will greet customers of power distributor Manila Electric Co. (Meralco) under deals awarded to its own sister companies, subsidiaries and affiliates without bidding, a lawmaker warned on Friday.

The power rate increase will further burden consumers who are already reeling from the inflationary effects of the Tax Reform for Acceleration and Inclusion (TRAIN) law, the lawmaker said.


In a statement, Bayan Muna Rep. Carlos Isagani Zarate said escalating electricity costs debunked Meralco’s claim that it contracted the least cost of electricity through power supply agreements.

Zarate said “power rates under these sweetheart deals are exorbitant.”


Consumers’ burden

If the Energy Regulatory Commission (ERC) approves these contracts, Zarate said, consumers would have to bear additional costs.

Power rates are now currently under siege by increasing costs of coal and depreciation of the peso against the dollar, he said.

At least seven power supply deals pending at the ERC, according to Zarate, would “cost us Meralco customers P5.22 per kWh.”

“This is P1.55 per kWh more than what Meralco wanted us to believe,” Zarate said.

He said the P5.22 rate would be “onerous and unconscionable” considering that some power generation companies not affiliated with Meralco “now offer electricity way below P5 per kWh.”

“Some even offer electricity at P2 per kWh,” Zarate said.


Good faith

Meralco spokesperson Joe Zaldarriaga had said the power deals were negotiated in “utmost good faith” and complied with ERC rules.

He said the resulting rates were “very competitive and favorable to consumers.”

Zarate, however, claimed that Meralco did not want to consider other offers because they supposedly came from companies not affiliated with the power distributor.

The seven power deals had been submitted to two House committees investigating Zarate’s claims.

Based on the power supply agreements pending at the ERC, the cost of power was computed at an average of P3.67 per kWh but Zarate said this was deceptive.

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TAGS: Carlos Isagani Zarate, Energy Regulator Commission, ERC, MERALCO, power rate hike, tax reforms, Train
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