IMEM will lead to high power rates, warn electric co-ops

CAGAYAN DE ORO CITY (MindaNews/13 May) — A scenario of electricity rates as high as P32 per kilowatt hour looms with the government planning to implement the Interim Mindanao Electric Market (IMEM) system in the island, a group of electric cooperatives warned on Monday.

Adrian Ebcas of the Northern Mindanao Electric Cooperatives Association (NORMECO) said this will be among the bases for their objections [to the IMEM] that they will raise to Energy Secretary Carlos Jericho Petilla who will meet them in Manila on Wednesday.

Ebcas said the scenario of electricity rates costing P32 per kilowatt hour will wipe out poor families and small businesses in Mindanao.

He said a small house with one or two bulbs using 30 kilowatts (kW) in a month will find itself billed at least P900 a month.

“We are not opposing IMEM but we are objecting the provisions that will lead to high electricity rates. We are duty-bound to protect our consumers,” Ebcas , who is also the general manager of Camiguin Electric Cooperative, said.

He said majority of the consumers of electric cooperatives are small houses using 30 kW a month and small business using less than 100 kW.

“This will wipe them out. The P32 per kilowatt hour of the IMEM do not include the transmission costs and taxes. The rate could run high to P35 per kilowatt hour,” he said.

Petilla will meet with managers of Mindanao’s electric cooperatives in Manila with the House committee on energy to ask them to withdraw their opposition to the IMEM.

The House committee on energy chaired by Rep. Reynaldo Umali (2nd district, Oriental Mindoro) passed a resolution junking the IMEM after electric cooperatives and consumer groups objected to the marketing system during a public hearing in Cagayan de Oro last March.

Rep. Rufus Rodriguez (2nd district, Cagayan de Oro) said Petilla asked to be given a second chance to talk to the electric cooperatives and promised to present a modified version of the IMEM.

“The committee and the cooperatives decided to give Petilla another chance. We will hear what he has to say,” Rodriguez said.

Ebcas said they opposed the IMEM Pricing and Cost Recovery Methodology that was approved by the Energy Regulatory Commission to determine the price of electricity.

He said power distributors will have no choice but buy the expensive electricity.

“Even if there are three power producers, all of them will sell at the same price because everyone wants to profit. That is no market,” he explained.

He said most power distributors are scrambling to buy modular generating sets with funds from the government rather than face the scenario of buying electricity in the spot market.

“We estimated that even running on diesel fuel, the electricity produce by modular sets will cost only P15 per kilowatt hour. It will be much cheaper,” he said.

The government has offered electric cooperatives money from the Malampaya funds to purchase the modular generating sets.

Costing P20 million per megawatt it can produce, the government are charging six percent per annum but electric cooperatives can return the power generators after two years.

The South Cotabato II Electric Cooperative has already leased a 15-megawatt modular generating set to ease its power shortage problems.

Electric cooperatives in Camiguin and Misamis Oriental are also buying two-megawatt modular generating sets to augment their distribution.

There is nothing new with modular generating sets. The Ramos administration also offered them to the electric cooperatives during the power crisis in 1998. (Froilan Gallardo/MindaNews)

URL: http://www.mindanews.com/top-stories/2014/05/13/imem-will-lead-to-high-power-rates-warn-electric-co-ops/

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