Cepalco to cut electricity rates next year

Here´s some good news from consumers: the Cagayan Electric Power and Light Co. (Cepalco) has pledged to cut its average power rates by a minimum of five (5) centavos per kilowatt hour starting next year.

During the November 4, 2010 public hearing conducted by the Energy Regulatory Commission (ERC) at Searsolin, Engr. Richard S. Ratunil, Cepalco economic regulatory compliance officer, disclosed the utility´s intention to cut its average distribution rates for by five (5) centavos per kilowatt hour starting July 2011 and by the same amount each year for the subsequent three years.

Ratunil made the disclosure in the course of his cross-examination by Atty. Edison A. Arriola, counsel for Konsumanteng Kagay-anon, Inc. (KKI) which is intervening in ERC Case No. 2010-064C regarding Cepalco´s application for Annual Revenue Requirements under the Performance Based Rate-setting (PBR) scheme for the 3rd Regulatory Period covering 2011 t0 2015.

"We are pleased to inform you that there was confirmation from one of Cepalco´s witnesses regarding the drop in Cepalco´s charges for the next four (4) regulatory years (i.e., at P0.05/kWh every year) due to the lower revaluation figure given by its independent appraiser," Arriola said in a report submitted to KKI after the hearing.

For a consumption of 200 kilowatt hours a month, the proposed reduction would reduce average electricity bills by P10 in 2011, P20 in 2012, P30 in 2013 and P40 in 2014. Residential rates are projected to have even higher reductions.

During the latest public hearings held November 3-4, 2010 at Searsolin, KKI cross-examined five of the witnesses presented by Cepalco.

"We are still waiting for all the compliances we required of Cepalco – e.g., salaries of employees, enumeration of all assets acquired in 2010, method and results of appraisers in the sampling on assets to be inspected and verified, and others," Arriola said in his report.

Upon submission of all the compliances, Arriola said Cepalco has fifteen (15) days within which to file its Formal Offer of Evidence (FOE). Similarly, upon receipt of the FOE from Cepalco, KKI has fifteen (15) days within which to file its comments on same.

Cepalco has reserved the right to file their reply to KKI´s comments, and similarly, KKI has reserved its right to file a rejoinder within five (5) days from receipt of Cepalco´s reply, Arriola added.

Within thirty (30) days from receipt of or lapse of the period within which to file a pleading, Cepalco and KKI will simultaneously file their Memoranda, after which the application will be deemed submitted for decision by the ERC.

"We will wait for our official receipt of the ERC´s Draft Determination, the notice of which will inform us how much time we have to file our Comments thereto," Arriola said.

Besides KKI, other intervenors in the case include the City of Cagayan de Oro and Engr. Robert Mallilin.

Earlier, electricity consumers throughout Mindanao also stood to have a portion of their electricity bills for the past seven months refunded by the National Grid Corporation of the Philippines (NGCP) after the ERC ordered the firm to reduce its ancillary charges by almost 50 centavos per kilowatt hours from the rates originally applied for by NGCP and Therma Marine Inc. (TMI), an affiliate of Aboitiz Power which operates the power barges M1 and M2.

KKI and Cepalco were both active participants in Coalition 6/25, a coalition of Mindanao consumer groups, distribution utilities, NGOs, LGUs and media which were vigorously opposing the "rate shock" power users throughout Mindanao experience at the height of the Mindanao Power Crisis as a result of the ancillary rates billed by NGCP from power provided by TMI for ancillary services.