DLPC’s power rate increase is irrational and anti-consumer; says Consumer Alert

MEDIA RELEASE | August 8, 2010 | Davao City - Invoking the Electric Power Industry Reform Act (EPIRA) as its grounds for a P0.08 centavo power rate increase per kilowatt-hour, Davao Lights and Power Company’s (DLPC) new imposition is as irrational and anti-consumer as the EPIRA.  

Local consumer group Consumer Alert! believes that the much protested EPIRA has unfairly put aside the welfare of the consuming public while making it legal for multinational and international companies to exploit the country’s power resources for profit and monopoly. And on the same premise, DLPC’s real intention of imposing the increase is to siphon profits more than anything else.      

Given that Davao Light has a supposed customer base of 257,100 residential, commercial, and industrial users--of which 87% are residential--consuming 1.371 billion kilowatt-hours  (2008 figures), the new rate of an increase of .08 centavo would mean an additional gross income of P109,680,000 for Davao Light, an amount siphoned off from the hard-earned money of consumers in the city.

DLPC’s claim of legitimacy in their new imposition using the EPIRA is by all forms irreconcilable and unacceptable with the people’s worsening economic condition.  It is condemnable on ground that it further drowns the people in crisis.

EPIRA itself is anti-people.  It was enacted in 2001 to implement reforms in the power sector including the privatization of the National Power Corporation or NAPOCOR following the recommendation of the International Monetary Fund (IMF) in exchange of the loans the government was trying to avail from the Japan Export-Import Bank, Asian Development Bank (ADB), and the World Bank (WB).

NAPOCOR’s privatization included the government’s assumption of its P200 billion debts that would be paid by the end users, meaning the ordinary consumers broadly consisted of poor Filipino families.  EPIRA also provided legal means for Independent Power Producers (IPP) to collect the onerous Purchased Power Adjustment (PPA) concealed in the new electric bills as generation charge, transmission charge, system loss charges, subsidies and franchise taxes.  Most of these IPP’s are owned by foreign transnational corporations in partnership with local power tycoons like the Lopez, Aboitiz, Alcantara, etc.

Since the passage of EPIRA, power rate increase became relentless under the control of IPP’s.  Standing inutile on the side is our own government which regulatory power is constricted under EPIRA.   Aboitiz-owned DLPC is among the IPP’s in the country which operations, as the sole independent power supplier in Davao City, has earned for the company huge profits over the years.  In fact, this was among the bases of DLPC’s power rate increase as it invoked the Performance Incentive Scheme under EPIRA.

DLPC is not at all losing for it to impose an increase in the power rate.  Aboitiz-owned HEDCOR is even adamant in owning the water rights of Tamugan River for its hydropower plant.  All in all, the Aboitiz thru their ownership of DLPC and HEDCOR will soon make the generation and supply of power in the City a monopoly and extremely profit-driven if such things are tolerated.

Davao City is haven for over 1.2-Million people whose day-to-day activities are largely dependent on electric power. P0.08 centavo  is of great value for every micro-business owner, ordinary employee, and urban poor settler of the City.  There is no justification to anything that DLPC will impose at the expense of the people.  This is clearly profit greed and the people’s economic interest is at risk.

Consumer Alert! is among the local groups that are protesting the power rate increase.