Consumers are suffocating

Egay Uy .

HOW costly is electricity now? You may not have noticed it but the reason your electric bills may have increased lately is that the electric rate per kilowatthour is now P13 – trese pesos kada kilowatthour!

Time was when electric rates were at P6 or P7 per kilowatthour, or even lower.  Then came the operation of Mindanao Energy Systems or Minergy in Tablon, this city.  Minergy started to supply electric power and energy to Cepalco after the power crisis hit Mindanao in the 1990s.

Construction was delayed such that the timing of its operation was not totally perceived by the consumers as part of the solution to avert the lack of power supply then – and in the future.

When Minergy started collecting fixed and variable charges from Cepalco, the end-users were made to pay some 50 centavos more in electric energy even if Minergy did not deliver any amount of electricity to the Cepalco receiving points. It was the take-or-pay provisions of the power supply agreement that caused that.

I was still with Cepalco at that time and we had a hard time, yes it was difficult to explain to the consuming public, that Minergy’s unused or undelivered electricity had to be paid.  We even went to the extent of translating the power purchase agreement in the most understandable analogy.

We said paying for undelivered electricity was like buying a flashlight which would become handy when power is interrupted at night without notice.  Or like having a spare tire in your motor vehicle which you already paid for but do not wish to use often. The flashlight and the spare tire simply provide peace of mind at the time of need.

Consumer groups wanted Cepalco to be disconnected from Minergy to avoid the additional cost of undelivered electricity. But that was what the power industry regulator ordered. Take-or-pay was the name of the game, a game that saw the end-user holding the losing bag.

Now, we have allegations of overpricing in the contracting of electricity from generation companies by distribution utilities.  This would not have been made possible, if indeed there are such cases, without the willing cooperation of the regulatory body, the Energy Regulatory Commission.

There appears to be a need to thoroughly review power supply contracts that have been entered into among players in the electric industry and the how these were approved by the regulatory body of government whose participation in the contracting and approval processes would have surely protected the interest of the end-users.

At P13 per kilowatthour, consumers are suffocating.