‘WE HEAR YOU’: MORE Power heeds lawyer’s call for lower electricity rates

By Francis Allan L. Angelo

 

Former Iloilo Vice-Governor Atty. Rolex T. Suplico, who is also a former congressman and a franchise lawyer, today called on MORE Electric and Power Corp to lower its electricity rates in Iloilo City.

MORE Power is a grantee of a distribution utility franchise under Republic Act No. 11212, which was approved by President Rodrigo Duterte on February 14, 2019.

Suplico said that “(a) legislative franchise is always for the public interest. It is a special privilege conferred by the State to an entity through the legislative branch of government for the operation of public utilities and public services. Its terms and conditions are specifically prescribed by Congress.”

He said that there are several provisions in RA 11212 which protects the consumers in Iloilo City. He cited Section 2 on the Manner of Operation of Facilities of RA 11212, which provides that,

“All electric distribution facilities, lines, and systems for electric services owned, maintained, operated, or managed by the grantee, x x x, shall be operated and maintained at all times in the best manner. It shall be the duty of the grantee, x x x, to continuously improve its facilities and employ the latest technology and innovation that promote efficiency and is beneficial to consumers. x x x.”

In addition, Suplico quoted Sec. 5 on Responsibility to the Public of the same law, which provides that,

“The grantee shall supply electricity to its captive market in the urban area and rural portions of its franchise area in the least costly manner. In the interest of the public good, as far as feasible and whenever required by the ERC, the grantee shall modify, improve, or change its facilities, poles, lines, systems, and equipment for the purpose of providing efficient and reliable service and reduced electricity costs. The grantee shall charge reasonable and just power rates for its services to all types of consumers within its franchise areas.”

He also quoted Sec. 7 on Protection of Consumer Interests thereof, which provides that:

“The herein grantee shall establish a consumer desk that will handle consumer complaints and ensure adequate protection of consumer interests. The grantee shall act with dispatch on all complaints brought before it. The grantee shall reduce the duration and frequency of interruptions in its network and in that regard, shall observe the System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI) imposed by the ERC.”

“All told,” Suplico said, “these provisons as well as the other provisions in RA 11212 protect the public welfare. Undoubtedly, MORE Power owes its franchise to the people of Iloilo City. And its franchise requires it to serve the Ilonggos with the lowest possible electricty rates. I, therefore, call upon MORE Power to deliver on its commitments and the mandates of RA 11212.”

 

‘WE HEAR YOU’

In a statement, MORE Power President Roel Castro said they are now starting to implement the competitive selection process (CSP) for future power supply contracts.

The CSP can be likened to a competitive bidding process to attract the most competitive rates from suppliers.

Castro said the Energy Regulatory Commission (ERC) authorized them to enter into one-year emergency contracts with current suppliers and to start the CSP before the one-year period ends.

But even before the CSP began, Castro noted that MORE Power managed to slash electricity rates right after taking over power distribution services in Iloilo City in February 2020.

“We are very happy to inform the Ilonggos that our computations resulted to an effective rate of Php9.61/kWh for residential consumers. This will be the rate reflected on their first bill starting April 20, 2020,” Castro said.

Castro said that for commercial and industrial type customers, effective rates will depend on their respective load consumption but he assured that rates will be lower.

MORE’s initial residential rate is 74 centavos less than the previous residential rate of Php 10.35/kWh back in February 2020.

How was MORE Power able to bring down electricity rates in the city?

“Our strategy was to source out a portion of Iloilo City’s electric supply from cost effective power suppliers in order to bring down the effective rate for all our customers,” Castro said.

According to Castro, MORE draws 30 percent of Iloilo City’s power supply from KEPCO SPC Power Corporation (KSPC) in Cebu, Aboitiz Power Renewables, Inc. (APRI) in Luzon, and the Wholesale Electricity Spot Market (WESM) where electric supply prices are lower.

The remaining 70% of the City’s supply is sourced from Panay Energy Development Corporation (PEDC) and Panay Power Corporation (PPC), both located in LaPaz, Iloilo City.

Charges from power generating companies and the WESM form part of the generation charge which is indicated in each consumer’s electric bill.

Generation charge is a pass-on charge remitted to power suppliers and, on average, takes up 60% of a consumer’s total electric bill.

“Distribution utilities that strategize on how to source out electric supply from cost effective power suppliers are responsible Distribution Utilities that understand their commitment to the consumers. Truly enough, MORE assures the Ilonggos that we will continue to do so in the next 25 years,” Castro added.