Cebu biz chamber to meet ERC on power cost probe

By Carlo Lorenciana

April 26, 2021, 8:20 pm

CEBU CITY – The Cebu Chamber of Commerce and Industry (CCCI) is set to meet with officials from the Energy Regulatory Commission (ERC) in response to the former’s request for a review of Visayan Electric Company’s (VECO) power supply agreement (PSA) with its generator company, Cebu Private Power Corp. (CPPC) in 2013.

Visayan Electric, owned by the Aboitiz Group, is the biggest power distributor in Cebu province.

A virtual conference was set by ERC on April 26, with CCCI in attendance.

In a press statement on Monday, CCCI said it received a letter dated April 15 from ERC, setting the schedule for the probe meeting.

“The CCCI had earlier appealed to the Commission to conduct a review on the VECO-CPPC 2013 PSA after finding 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,” the business group said.

It 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.

The CPPC power plant was constructed by East Asia Diesel Power Corp. for VECO under built-operate-transfer scheme for a 15-year cooperation period which ended in November 2013. However, a new supply contract for another 10 years was entered into and approved by ERC.

To date, CPPC capacity fees are passed on to VECO consumers amounting to roughly PHP66 million a month, on top of the generation cost, according to CCCI. CPPC’s per kilowatt hour (kwh) rate ranged from PHP26 to PHP1,470.92 in 2020.

“Cebu’s electricity has always been one of the most expensive power rates in the country,” CCCI pointed out.

In an ERC statement dated Dec. 28, 2020, its chairperson and CEO Agnes Devanadera provided the range PHP3.9513/kwh to PHP5.0985/kwh as November 2020 generation charge by distribution utilities in Luzon and Visayas, the highest range belonging to Visayan Electric.

“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 staunch advocate of reasonable power rates in Cebu since 2019,” CCCI said. (PNA)