CCCI to meet ERC for VECO probe on alleged high electric rates

MINERVA BC NEWMAN

CEBU CITY – The Cebu Chamber of Commerce and Industry (CCCI) is set to meet with the Energy Regulatory Commission (ERC) in a virtual conference on April 26 for the review of the Visayan Electric Company, Inc.’s (VECO) power supply agreement (PSA) with its generator company Cebu Private Power Corporation (CPPC) in 2013 after it found substantive grounds on alleged anti-competitive behavior in the agreement and that its implementation is contrary to the requirement in the Electric Power Industry Reform Act  (EPIRA) that distribution utilities should supply electricity in the least cost.

CCCI’s appeal argued that the increase in generation rates for 2020 is largely attributable to the amount of capacity fee being paid by VECO to CCPC, which still includes Capital Recovery Fee (CRF). CRF is the cost for the recovery of capital or investment incurred in putting up the power plant, CCCI added.

According to CCCI that the CPPC power plant was constructed by East Asia Diesel Power Corporation for VECO under built-operate-transfer (BOT) scheme for a 15-year cooperation period which ended in November 2013.

However, a new supply contract for another 10 years was entered and approved by ERC, CCCI bared that to date, CPPC capacity fees are passed on to VECO consumers amounting to roughly P66-Million a month, on top of the generation cost. CPPC’s per kWh rate ranged from P26 to P1,470.92 per kwh in 2020, the appeal reads.

These allegations will be addressed by VECO in that virtual conference.  Cebu’s electricity has always been one of the most expensive power rates in the country, CCCI alleged.

In an ERC press release dated December 28, 2020, Chairperson and CEO Agnes VST Devanadera provided the range PhP3.9513/kWh to PhP5.0985/kWh as November 2020 generation charge by DUs in Luzon and Visayas, the highest range belonging to VECO.

Identifying electricity as a major cost driver and as one of the top obstacles in the ease and cost of doing business, the CCCI has been a staunched advocate of reasonable power rates in Cebu since 2019. (Photos: Google Images)