INSIDE PAGE

by Fernan A. Gianan

Why NPC never has it so good

Every month, starting from the 10th to the 13th day, people who are not in the habit of paying for house expenses wonder at the throng of obviously agitated and disturbed persons besieging an office at the Olarte building near the Virac fountain.

Agitated they are, for if they do not fork over part of their hard-earned money to the First Catanduanes Electric Cooperative, Inc., the lights in their houses would go off on the third day. Poof! Just like some god decided to make the rest of your life dark and miserable.

They are also disturbed, for their power bills never seem to shrink, courtesy of those meaningful letters "PPA" and "FOREX." These initials are the reasons why the National Power Corporation should have never become bankrupt as it is today, ready to be privatized and sold off like body parts of a rotting carabao.

These two things are among what the power industry calls "Cost Adjustment Mechanisms." There are four such mechanisms for adding more misery to the public woes: the Fuel and Purchased Power Cost Adjustment (FPCA), the Foreign Exchange Adjustment Clause (FOREX), the Purchased Power Cost Adjustment (PCA), and the Wage Adjustment Clause (WAC).

According to a PR flier from Napocor, the FPCA is "an adjustment clause designed to enable NPC to automatically recover from or pass on changes in prices of fuel or cost of purchased power to its customer(s) without having to resort to the cumbersome procedure of filing a new rate case as often as material changes in the factors affecting the reasonableness of the rates occur."

On the other hand, the FOREX is "an adjustment formula adopted to allow utilities to recover from foreign exchange losses arising from increases in the cost of servicing their foreign currency debts (excluding interest) and/or foreign exchange related operating expenses.

The PCA is "a devise intended to enable an electric utility to pass on to its customers decreases or increases above or below a specified base price in the cost of power that it purchases from NPC and other generating companies."

The fliers this writer got from FICELCO did not include one for WAC but I assume this refers to another devise intended to enable the coop to raise the salaries and wages of its employees whenever there are mandated salary hikes. In short, any WAC charge will go to the take-home pay of coop officials and employees.

These devises or mechanisms enables NPC and FICELCO to automatically pass on to consumers any increases in the price of fuel imported from Arab nations as well fluctuations in the peso-dollar rate. Unlike jeepney drivers, they never would have to wait for hearings of proposed fare or rate hikes to end, carrying the burden of higher gas prices in the interim, in order to impose higher rates.

This is how the charges are passed on by NPC to consumers: Napocor makes the computation and submits the proposed charges to the Energy Regulatory Board (ERB) and the Philippine Rural Electric Cooperatives Association (Philreca). ERB approves the extra charges after verification by Philreca. A coop source says Napocor overcharged coops four times in the past and had to reimburse the coops each time.

Power Bill No. 02078 sent by NPC Catanduanes Grid Manager Serafin D. Marcaida, Jr. to the coop last October 4, 2000 shows that for the period August 26 to September 25, 2000, NPC sold the coop 1,617,878 kilowatt-hours, costing a total of P3,304,515.82 based on the basic charge of P2.0425 per kwh.

Added to this figure were the FPCA at P0.1296 per kwh for P209,676.99 and FOREX at P0.3704 per kwh for P599,262.011. Thus, the add-ons totalling P808,939.001 plus the total basic charge equals the total NPC billing of P4,113,454.82.

Now, if you take a closer look at your electric bill, just below the computation of the amount is a column outlining how of the basic and add-on charges. "Basic" apparently refers to the cost of power charged to the coop by Napocor, with PPA, WAC and FOREX as add-on charges. Bringing up the rear are "Others" and "Reduction," opposite of which you may have never seen any figure except "0.0000" since the juice got turned on in your home.

Your FICELCO bill for the period August 20 to September 20, 2000 (why is this not the same as NPC's billing period?) should show a Basic charge of P4.97 per kwh (compared to NPC's P2.0425) and the PPA of P0.8554, which is greater than NPC's total pass-on charges of P0.50 per kwh for the same period.

We assume the PPA referred to in the FICELCO bill is the Purchased Power Cost Adjustment, which allows any rural electric cooperative to pass on to its consumers any increase above the basic price charged by NPC for power bought by the coop.

What consumers need to understand is how the coop computes the cost it adds to NPC's pass-on charges, since it is clear the PPA is greater than NPC's add-ons by P0.3554 or 71 percent.

Since it is the season of disclosures in the Philippines, perhaps it is time consumers see and understand how these charges are being tacked on to their bill. Include also how it happens that FICELCO's basic charge of P4.97 is higher by almost three pesos than NPC's basic fee so those who are mystified are finally and satisfactorily enlightened.