The Pinoy Business Chronicle

Business news and analysis. Covering financial news, economic issues, stock market data, local business, business policy and more.

Philippines Economy News

Rising missionary charges called ‘misguided’ after Congress queries DoE

rising missionary charges called misguided after congress queries doe 816x445 - Rising missionary charges called ‘misguided’ after Congress queries DoE

A BILL component that provides electrification to far-flung, unenergized parts of the country should be reduced, a consumer group said, after Congress questioned the Department of Energy (DoE) about the rising trend in such charges.

During budget hearings last week, Bayan Muna Representative Carlos I. Zarate asked Energy Secretary Alfonso G. Cusi on the increases in the universal charge for missionary electrification since 2002.

Mr. Cusi said a subsidy component is authorized under Republic Act. No. 113711, or the Murang Kuryente Act, which requires the government to absorb some universal charges passed on to consumers using a P208-billion subsidy fund.

“This may be misguided because what (the) DoE should do is (to) instruct the National Power Corporation (Napocor) to reduce its UC-ME (universal charge for missionary electrification) claims,” Victorio A. Dimagiba, president of Laban Konsyumer, said in a statement.

Lowering the charge is “a good possible move to protect consumer welfare and sustain lower power rates,” considering that fuel costs of the Napocor went down “substantially” with the recent decline in fuel prices, he said. Since 2015, the average spot price of benchmark Brent Crude fell 23% to $40 per barrel this year.

The consumer group estimates that the missionary charge has risen around 318% to P0.1561 per kilowatt-hour (kWh) from 2003. The present rate was set in 2015.

A total of P99.66 billion in universal charge payments were remitted to Napocor as of December 2019, data from the Power Sector Assets and Liabilities Management (PSALM) Corp. showed.

In March, Napocor filed with the Energy Regulatory Commission (ERC) a petition to increase the missionary charges for 2021 by five centavos to P0.2055/kWh. The commission is still hearing the application.

Napocor was asked to comment on its ERC application but had not responded at deadline time.

Mr. Zarate said the DoE has a mandate under the Electric Power Industry Reform Act to not only ensure the country’s total electrification but to also do this “in a cost-effective manner and least burden” to power consumers and the government.

“Secretary Cusi, in particular, should ensure that unscrupulous individuals and/or companies involved in this irregularity should be held accountable,” he added.

For not bringing down power rates, Laban Konsyumer alleged that the government is “lacking in leadership… when many Filipinos are struggling to make ends meet.”

“They should be more proactive in developing schemes and plans to better benefit the customers, like the FM (force majeure) claims which lowered generation charge being charged to consumers,” Mr. Dimagiba said.

Laban Konsyumer has been pressing both the government and the private sector to trigger force majeure clauses in all power supply contracts to cut down generation charges paid for by consumers.

It cited the case of Manila Electric Co.’s (Meralco) rates, which recently fell for the fifth month since April, because of a force majeure invocation. To date, it was able to save P2.4 billion for its consumers.

Laban Konsyumer said the government can ask the other private power utilities to do the same. However, the decision to alter power supply agreements rests with the contracting parties, according to the DoE. — Adam J. Ang

Leave a Reply

Theme by Anders Norén