Power producers tagged for ‘profiteering’ try
The Power for People Coalition (P4P) has condemned the Philippine
Independent Power Producers Association (PIPPA) for allegedly lobbying for changes in regulations on outages and spot market price caps, which it said would increase power rates while lowering the accountability of power companies for power outages.
In a statement, P4P said PIPPA is proposing for the Energy Regulatory Commission (ERC) to relax the reliability benchmark rule, which sets a limit on allowable outages for power plants, ensuring that the available electricity to the public is sufficient to meet demand.
P4P also alleged that PIPPA likewise wants to eliminate the current price caps on spot markets, which serve to protect consumers from excessive cost of electricity during times of low power supply and high demand.
“PIPPA wants to create a situation where its members are rewarded for not doing their jobs of guaranteeing reliable power supply. Both rules, if adopted, allow power plants to make a killing from consumers when more power plants are out, a perverse incentive that will cause high prices amid rolling brownouts,” said P4P convenor Gerry Arances.
He said that unplanned outages are the main culprit in the annual power crises of the country before the pandemic, causing the ERC to set reliability benchmarks to hold unreliable power companies responsible for reducing supply.
Arances said that the power industry is an exception to the rule that higher profits require higher production.
“All that stands between consumers being forced to pay more for less electricity are these two rules, which PIPPA wants to eliminate just as electricity usage is set to peak in the summer season,” he warned.
Arances said PIPPA is also pushing to raise caps on electricity sourced from the spot market, which supposedly helps cushion prices charged to consumers.
“This is gaming the system for profit, plain and simple. The relaxed rules on outages together with loosening regulation on prices in the spot market PIPPA is lobbying for will increase opportunities for profiteering,” he said.
“We respectfully remind the ERC on their important role to ensure electricity prices are affordable for consumers. If these proposals become policy, the consumers will once again be on the losing end of the stick,” he added.
The ERC is set to hear the PIPPA proposals today. –