TUCP contests VECO’s tariff hike

Published by rudy Date posted on May 22, 2011

CEBU, Philippines – The Trade Union Congress Party, a Visayas-based partylist group filed a petition with the Energy Regulatory Commission to contest the proposed tariff hike filed by the Visayan Electric Company.

TUCP Partylist Rep. Raymond Democrito C. Mendoza said that TUCP will contest the proposed tariff hike and will actively oppose it during the public hearings to be conducted by the agency in Cebu City.

Mendoza said that the said petition is aimed to jack up its power tariffs using the so-called “performance-based rate-setting” formula which is being implemented by the ERC.

Under the performance-based regulation scheme, distribution utilities like VECO can file a petition for a rate hike after meeting certain performance criteria such as good management practices and efficient systems and operations.

Mendoza said that VECO’s utter disregard to the plight of ordinary workers and poor consumers in Cebu who bear the brunt of skyrocketing power rates within the company’s franchise areas is deplorable.

He said that Aboitiz Power Corp. which owns VECO, among other power generation and distribution companies, has gained a net income of P25 billion in 2010. In 2009, the company earned P5.7 billion in net profit.

TUCP likewise criticized ERC for lack of consultations with consumers and other stakeholders and for crafting the performance-based regulation scheme which just gave VECO and other distribution utilities more freedom to hike their rates with impunity.

Mendoza added that the new ERC’s PBR formula just allows VECO and other distribution utilities to charge more for what they should already be doing and for which they were already awarded franchises by Congress because they assured the government that they could serve the electricity consumers.

Mendoza suggested that ERC must place under moratorium its so-called performance-based rate setting methodology and must first call for national multi-stakeholders forum involving workers and consumers who have no idea how this new formula works. (FREEMAN)

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