TUCP hits formula for power rate increase

Published by rudy Date posted on May 5, 2010

MANILA, Philippines – The Trade Union Congress of the Philippines, (TUCP), the country’s largest party-list of workers, has condemned the Energy Regulatory Commission (ERC) for crafting and implementing the so-called “performance-based rate formula” which it claimed is the cause of skyrocketing prices of electricity.

“The ERC formula becomes the license for electricity utilities to jack up prices without any regard to actual economic conditions. The ERC is in effect saying to the utilities that greed is good,” said TUCP party-list Rep. Raymond Democrito Mendoza.

Recently, electric cooperatives and distribution utilities like Meralco, VECO, Cepalco and Davao Light and Power imposed rate increases which added to the heavy burden of workers and consumers in Metro Manila and elsewhere in the country. Power rates were increased anywhere from between 50 centavos to P1.50 per kwh to reward “supposed” performance improvements in utility operations.

Under the performance-based regulation scheme, a distribution utility or an electric cooperative can file a petition for a rate hike after meeting certain performance criteria such as good management practices and efficient systems and operations. An example of this would be more efficient payment collection, faster line connection and more responsive and immediate responses to client’s problems and complaints, restoring downed power lines and other performances. –(The Philippine Star)

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