ENERGY advocacy and consumer rights groups today slammed the Energy Regulatory Commission (ERC) and Department of Energy (DOE) for allowing non-competitive power contracts and high prices of electricity to plague consumers in Mindanao and demanded immediate action to ensure thorough and equal protection of consumers from power sector abuse.
In a 360-page complaint filed before the DOE’s Taguig office, groups under the Power for People Coalition (P4P) questioned over 70 power supply agreements entered into or applied for by electric cooperatives and distribution utilities in Mindanao that are in effect despite not having gone through the Competitive Selection Process (CSP), “a police power measure intended to protect the public interest against high electricity prices.”
“Electric cooperatives and distribution utilities in Mindanao have been violating their obligations of offering least-cost prices to consumers and employing acceptable procurement practices, and both DOE and ERC essentially allowed them to do so,” said Engr. Dave Tauli, Vice President of the Lanao Power Consumers Group.
By only selectively implementing CSP requirements, they doomed power consumers to at least two and a half decades of non-competitive pricing - the usual lifespan of power contracts, according to Tauli.
The June 30 2015 DOE circular ‘Mandating All Distribution Utilities to Undergo Competitive Selection Process (CSP) in Securing Power Supply Agreements (PSA),’ invokes a non-retroactivity clause for PSAs entered into or applied for before the circular’s date of issuance.
“It took 15 long years from when the Electric Power Industry Reform Act (EPIRA) was passed for the ERC to mandate least-cost pricing. Our energy regulators chose to disappoint further by watering down the protection offered by CSP to consumers,” said Atty. Luke Espiritu, President of the Bukluran ng Manggagawang Pilipino (BMP) who is also part of petitioners’ legal counsel.
He said the June 30 cut-off for PSAs covered by the CSP is an unnecessary distinction that is telling of just how serious the ERC and DOE are in shielding the public from high prices of electricity: barely, it seems.
According to the DOE’s latest EPIRA report, power consumers in Mindanao pay the highest electricity rates on average among the three island regions. P4P notes that noncompetitive pricing plays no small role in hiking power rates, citing the FDC Misamis coal plant, which charges 1.40 P/kWh more than what other generation companies offer to electric cooperatives in the Mindanao Grid, as one clear example.
“Even with the CSP, many power companies ― especially those relying on coal and other fuels ― were allowed to price the electricity they produce and enter agreements with distributors as they pleased, said Gerry Arances, convenor of P4P.
Arances said consumers in Mindanao reap the bitter fruit of this scheme, especially now as the price of coal and other fossil fuels in the global market continues to rise, and they are forced to shoulder higher generation costs. DOE and ERC must immediately amend the CSP rules and enforce them on all subsisting power contracts.”
The groups also urge the DOE and ERC to take a step further in ensuring just and consumer-centered power procurement processes by leveling the playing field for indigenous and sustainable energy sources.
“You have a Mindanao grid teeming with excess and unused electricity supply from coal plants. But electric consumers are suffering from expensive electricity rates while other franchise areas in the region suffer brownouts,” said Ian Rivera, national coordinator of the Philippine Movement for Climate Justice (PMCJ).
He said this is how mismanaged and convoluted electric power contracting is in Mindanao. It needs to be stopped. The case Mindanao electric consumers are filing today is to push power procurement rules and processes for renewable energy to be more accessible, stop unfair charges and reduce the reliance on electricity sourced from coal.
This will make electricity rates affordable while reducing GHG emissions, making the Mindanao grid more reliant and green while contributing to much-needed global climate action, according to Rivera. P4P said that the matter of unfair rates should be treated by energy authorities with urgency amid the ongoing economic crisis, especially for an island region recording minimum wages that, at P 275-352 per day, are on average the smallest in the country.
“Barya ang kinikita ng mga manggagawa ng Mindanao pero ginto ang sinisingil na pambayad sa kuryente. Matinding gutom ang inaabot na at aabutin pa kung hindi kumilos nang may buong pagmamadali and DOE at ERC,” said Ka Leody De Guzman, clean energy advocate and chairperson of BMP.
“Ngayong nalalapit ang araw ng mga Manggagawa at ang eleksyon, malinaw din kung ano ang ilang dapat agarang tuunan ng pansin ng susunod na administrasyon: ang pagpapamura sa mga bayarin sa kuryente, tamang sahod para sa lahat, at pagpuksa sa mga pang-aabuso laban sa mga konsyumer,” he said.
“Many coal and dirty energy companies in Mindanao benefited from not having to go through proper procurement processes, and its consumers and local communities who suffered from their profit-centered ways with high rates and the toxic pollution they produce,” Roldan Gonzales, Steering Committee Member of PALAG Na. There has to be immediate accountability from the authorities who should have been protecting us, and from all responsibility for high electricity prices consumers in Mindanao bear today,” he added.
