Moresco I cites global crisis for rate hikes

BOMBARDED no end for its exorbitant rate increase in power supply, the Misamis Oriental Rural Electric Service Cooperative, Inc. (Moresco I) ― the Philippines’ pioneer electric cooperative since 1968 ― said it cannot simply get away with the stinging effect of the global crisis.

This, being a coal-fired power plants-reliant provider of electricity in the locality; a corporation duly organized and existing under the provision of Presidential Decree 269,

Moresco I is a distribution utility operating in the franchise to provide electricity to its member-consumer-owners from the municipality of Lugait to Opol, the City of El Salvador, and some hinterland barangays of Cagayan de Oro.

It also provides power supply to at least 15 barangays in the municipality of Talakag, Bukidnon.

Largely impacted by the pandemic and the war between Ukraine and Russia, the global crisis has further sunk the peso to its worst performance in recorded history.

Moresco I said it has greatly affected the power supply in the Philippines and it could not avoid charging the consumers with higher rates from time to time.

“I think its high time now for the Senate to discuss this matter seriously because the power rate increase is really unbearable,” one Miles Salvaña Altamero took to social media in airing her complaint.

Another netizen Maricar Janog said the consumers could no longer rely on electricity.

“I guess, we have to look now for (another) alternative,” said Janog, fully aware that the rising costs of power in Mindanao can be attributed to the island’s over-dependence on coal-fired power plants.

From a 12.04 per kilowatt-hour surge in January 2022 to a steady 13.46 and 13.49 kWh hike in June and July, respectively, the local power consumers were greeted anew by another skyrocketing 14.93 kWh spike in August.

In a press release letter, Moresco I has dissected the anatomy of its monthly power bill by the increase in the value of electricity procured from generation companies.

Likewise, the rising cost of coal (mineral) mainly used as fuel for steaming to generate electric power was adversely affected by the peso devaluation, and the decline of coal supply from other countries obviously triggered by the Euro conflicts between Ukraine and Russia.

Such a dilemma, Moresco I explained, that coal prices have reverberated across the domestic market with local pump prices experiencing consecutive weekly increases, as well as the prices of electricity dependent on coal generation.

Already, the Mindanao Coalition of Power Consumers (MCPC) has called on the Department of Energy and the Energy Regulatory Commission (ERC) to step in and look into what it called onerous and consumer-unfriendly contracts between private power producers and local distributors.

“The Mindanao electric coops are entirely at fault for the increase in the rates they are charging. The increase in electricity rates is caused mainly by the increased costs of coal fuel. And the (electric cooperatives) entered into power supply contracts with the coal generation companies without doing competitive public bidding. Hence, they purchased the highest-priced coal power supply from the FDC coal plant,” said David Tauli, MCPC president and vice president for the Lanao Power Consumers Federation in Northern Mindanao.

Tauli, who is also a former senior vice president of the Cagayan Electric Power and Light Company, said the contracts must have been reviewed and nullified as it is considered illegal, noting that it has a “take-or-pay” provision that forces their consumers to pay for the electricity that they do not consume.

The power rates in Mindanao, Tauli said, have increased from an average of P6 per kWh to P12 – and from an average of P8 to P20 per kWh during peak hours – from 2016 to 2022.

It can be recalled that Senate President Juan Miguel Zubiri sought on August 8, a review and amendment of the 21-year-old Electric Power Industry Reform Act of 2001 as he noted the increasing power rates in Northern Mindanao, his home region, and elsewhere in the country.

During a privilege speech, Zubiri cited the case of Cagayan de Oro where he said power rates increased from P10.62 per kilowatt-hour in January to P14.90 in July.

“It has been 21 years since we passed the (Electric Power Industry Reform Act). If we need to review and amend it to respond to the condition at this time, we are prepared to do so. It is now ripe for review,” Zubiri said.