LKI PRESS STATEMENT- 2020-046
July 31, 2020
LABAN KONSYUMER – REITERATE CALL FOR POWER PLANT OWNERS TO IMPLEMENT NATIONWIDE FORCE MAJEURE TO LOWER GENERATION CHARGES.
Consumer Group Laban Konsyumer Inc. (LKI) reiterated its earlier call for the members of the Philippine Independent Power Producers Association (PIPPA) and the Energy Regulatory Commission (ERC) to implement Force Majeure Claim around the country, to lower generation charge for consumers, especially during this ongoing pandemic and quarantine periods.
The consumer group said “ERC and PIPPA are mum, and continue to remain silent and resistance, hesitant and uncooperative, on the topic of force majeure invocation… and even PIPPA rejected our earlier plea, proposal and letter. We wrote them twice and proposed that Force Majeure be implemented around the country, but both regulator and PIPPA did not give us or the proposal the time of day.
So we are making this statement once again to keep the pressure against the inaction of PIPPA members and the ERC in what could be an example of “regulatory capture.” They should follow the example of what Meralco did in their franchise area. So far Meralco customers have saved a total of Php 1.8 Billion in lower generation charges for its 7 million customers.
As reported in the news, Meralco is looking for more ways to bring down power rates. As an example, it invoked force majeure claims on power generators based on its power supply agreements as demands fell when the government imposed a lockdown from mid-March.
LKI President Atty. Vic Dimagiba added that “right now, the Force majeure claim of Meralco in their franchise area is very effective and can act as a jump-off point or peg for other parties wiling to join the mission to better serve customers, particularly those other Distribution Utilities , who are members of the PEPOA and Electric Cooperatives who have yet to do their own force majeure claims with their generation and power suppliers. Thus we demand that ERC and PIPPA members immediately look into the situation and assess leading the charge and making all DUs and ECs follow suit on what was done in Metro Manila and do their own execution of FM claims.”
LKI highlighted that based on Meralco’s statement, “In July, the force majeure claims totaled P265 million, equivalent to customer savings of P0.0877 per kWh in the generation charge. This represents avoided charges from the temporary suspension of mid-merit supply contracts.