Overcharged power

Egay Uy .

THERE have been assertions made by the Mindanao Coalition of Power Consumers president, Engr. Dave Tauli, that electric distribution utilities (at least one private-owned and sixteen electric cooperatives) in Mindanao have overcharged their customers because of questionable provisions in their respective power supply contracts with their suppliers of electricity.

The culprit, according to Engr. Tauli, is the “take-or-pay” stipulation in the power contracts where the electric utility or cooperative agrees to pay the power generation company for electricity even if it is not actually delivered.  In turn, the electricity distributor passes this to the customers through the unbundled rates because generation is a pass-through charge.

The electricity distributors on the other hand say that the power contracts were approved by the Energy Regulatory Commission, hence legal.  However as revealed by Engr. Tauli, the applications for approval of the power contracts should have been immediately dismissed by the ERC because of an intrinsic infirmity – failure of the electricity distributors to subject the power supply procurement to competitive bidding.

The ERC commissioners who approved the questioned power contracts may have been grossly negligent in granting the approval, or worse, there may have been some shenanigans in the approval process.  As we know, the power contracts between power generations companies and electricity distributors involve hundreds of millions of pesos.

According to Engr. Tauli, “All previous cases for approval of power supply contracts that were submitted to the ERC complied with the requirement of Republic Act No. 9136, the Electric Power Industry Reform Act of 2001 (EPIRA), for distribution utility companies to carry out competitive selection process prior to entering into power supply contracts with generating companies.”  The competitive selection process was however a missing factor in the execution of the power supply contracts that are now being questioned.

As estimated by Engr. Tauli, the impact of the overcharging in the case of Moresco-1 alone is a staggering 400 million pesos – the total over collection, if we call it that, over a period of two years from March 2015 to March 2017.  The good side of its was that Moresco-1 decided to terminate the power questioned supply contract in 2017, hence the over collection also ceased.

The electric distribution companies that have overcharged their customers should refund the undue collection.  They should not be unduly enriched at our expense.

The over collection caused by the overcharging do not even benefit the distribution utilities because these are turned over or paid to the generation companies.