SENATOR Win Gatchalian is seeking lower electricity rates for consumers in Palawan following rate hikes implemented by the Palawan Electric Cooperatives (PALECO).
In a letter addressed to Energy Secretary Raphael Lotilla, Gatchalian asked the energy department to reconsider its policy of withdrawing subsidy, in the form of the universal charge for missionary electrification (UC-ME), from PALECO saying the policy has greatly affected electricity consumers in Palawan who have to shoulder higher generation charge.
PALECO had earlier entered into two Emergency Power Supply Agreements (EPSA) following an order issued by the Energy Regulatory Commission (ERC) to terminate its power supply agreement (PSA) with Delta P, Inc. (DPI) for 20 megawatts because it wasn’t compliant with the competitive selection process (CSP) requirement of the DOE.
Another EPSA with DMCI Power Corp. (DPC) was prompted by the expiration of PALECO’s PSA with Power Generation, Inc. for 7.2 MW, the delayed entry of its new PSA with S.I. Power Corp., and to meet increasing demand.
As the two EPSAs are not entitled to the UC-ME subsidy, the blended generation charge of consumers has increased from P6.9520 in October 2023 to P9.7858 in February 2024, accounting for an increase of 45.94%.
“While I understand the policy objective behind the non-entitlement of EPSAs to the UC-ME is to hold distribution utilities accountable for their failure to properly forecast and manage the demand of their franchise areas, I would like to personally suggest that the policy be reconsidered for the protection of consumers,” said Gatchalian, who serves as the vice-chair of the Senate Committee on Energy.
According to Gatchalian, the non-entitlement to the UC-ME should only apply to EPSAs that are not a result of force majeure or fortuitous events that are beyond the control of the distribution utilities (DUs).
“Given that the force majeure or fortuitous event is beyond the control of the distribution utilities, then consumers should not be penalized for it,” Gatchalian told Lotilla.
Also, the difference between the subsidized approved generation rate and the true cost generation rate should be paid by the DU from its own funds and should not be passed on to consumers,” he emphasized.
“If the EPSA is a result of an action or inaction of the DU, then the DU itself and not the consumers should shoulder the cost,” he said.
