Consumer group calls on power firms to further cut rates

By Alena Mae S. Flores – March 27, 2020 at 07:30 pm
from manilastandard.net

Consumer group Laban Konsyumer Inc. on Friday called on power plant operators to further reduce the cost of electricity to help mitigate the impact of the 30-day enhanced community quarantine.

“It is a difficult situation nowadays for the Filipino consumer, especially when it comes to making money since most people are not able to work any longer. Because of this, our group is calling on the owners of the power plants to find a way to lower the power generation costs that they will be passing on to consumers,” LKI president Victorio Dimagiba said in a letter to Anne-Estorco-Montelibano, president and executive director of Philippine Independent Power Producers Association Inc.

Dimagiba said while power rates from the Wholesale Electricity Spot Market, the country’s trading floor of electricity, should be at an all-time low amid the lower demand, the force majeure provisions in  supply agreements should be reviewed.

Aside from the WESM, power distributors secure their electricity from supply agreements and independent producers.

“It is our understanding that power supply agreements typically have force majeure provisions that distribution utilities and electric cooperatives can invoke, to reduce contract capacity commitments at this time, but the sad reality facing us all is that generation companies may object to this because it will negatively affect their profit and bottom line, even during these times of national crisis,” Dimagiba said.

“So we at LKI are vehemently calling on power generation companies to be cooperative with our proposal so as to relieve the burden that consumers are sharing all over the country during the health crisis,” he said.

Dimagiba said there should be automatic provisions in the power supply agreements and independent power producers to lessen the impact on consumers.

“Therefore we call on generation companies to relieve contract capacities with distribution utilities nationwide,” he said.“

Generation companies should share the burden and reduce their contract capacities to avoid stranded cost or refuse fixed costs that will be shouldered by customers. There are provisions in the contracts between the distribution utilities and the generation companies pertaining to that, so we hope that the generation companies do not object.” Dimagiba said.