Business groups prod Noy on power issues

Published by rudy Date posted on May 18, 2014

MANILA, Philippines – Business groups yesterday urged President Aquino to work on achieving power supply security and competitive power rates to allow the country to realize inclusive growth and industrialization.

In a joint letter to the President, the groups, led by the Philippine Chamber of Commerce and Industry, said “power supply security and competitive power rates must be defined as major twin initiatives to realize aggressive industrialization and inclusiveness.”

The businessmen cited the P3.44 per kilowatt-hour record increase in the generation charge for December 2013 that made Philippine electricity rates the highest in Asia as well as the recent power outages in Mindanao as two obstacles to attracting new investments and achieving sustained economic growth.

Blackouts hit many parts of Metro Manila and Bulacan the other day following the emergency shutdown of one unit of the 700-megawatt Pagbilao coal-fired power plant in Quezon.

The problem is most glaring in Mindanao. where significant power capacity is not seen to be available until 2015.

The other groups calling for competitive power rates are the Alyansa Agrikultura, Chamber of Mines of the Philippines, Employers Confederation of the Philippines, Philippine Exporters Confederation, Semiconductor and Electronics Industries of the Philippines Inc., American Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, and the Korean Chamber of Commerce of the Philippines.

“It remains uncertain whether the original capacities earlier projected to come within the year could still be achieved. But even if we were to assume positively, it is apparent that the lack of power supply cannot be sufficiently addressed,” the groups said.

“There is also no clear program for achieving reasonable and competitive power rates. It seems we are merely assuming that the entry of competition would suffice to solve our problems,” they added.

The business groups called on the government to undertake programs to achieve reasonable and competitive power rates for the country to accelerate industrialization and attract foreign investments, which will in turn create jobs and make growth more inclusive.

“Power supply security and competitive power rates must be defined as major twin initiatives to realize aggressive industrialization and inclusiveness. The government must give utmost attention to both public and private sector cooperation to achieve these objectives,” the groups said.

They said the Department of Energy should not be left alone to figure out the solutions to address the problem.

Instead, the entire economic cluster must work together to evaluate the situation and come up with strategies on how to achieve power supply security.

Promoting fair competition is also necessary to achieve power supply security and competitive electricity rates, they said.

They said there is no need to push for amendments to Republic Act 9136 or the Electric Power Industry Reform Act as the executive branch can use its provisions to improve processes and policies in the generation sector.

The groups said the business community is ready to work with the government to address the energy problem.

Re-compute power rates

Meanwhile, party-list group Bayan Muna urged the Energy Regulatory Commission (ERC) to re-compute power rates in at least four provinces and Baguio City.

“We have received reports that among those affected by the unjust electricity price hike in the Wholesale Electricity Spot Market (WESM) during the Malamapaya shutdown in November-December are the people of Pangasinan, Camarines Sur, Nueva Ecija, Bataan some provinces in the Visayas, and Baguio,” Rep. Neri Colmenares said.

He said the high WESM prices had been passed on to consumers in these areas.

With ERC’s decision voiding spot market prices in November-December after finding them “not rational, reasonable and competitive,” Colmenares said the commission has to order power distributors in these provinces to re-compute their rates and make the appropriate refunds.

“This must be done by the ERC now because power rate hikes are inflationary in nature and the recalculation in provinces would result in lower prices of goods,” he said.

Colmenares warned ERC officials that they would face charges if they fail to issue the necessary order.

“We will take the ERC to court and charge its members before the Office of the Ombudsman if they refuse to recalculate and order the refund,” he said.

He said the regulator should also check whether rates in other provinces had increased on account of the high WESM prices in the latter part of last year.

If they had gone up, these should also be re-computed and the necessary refunds should be made, he added.

In Metro Manila and nearby provinces like Bulacan, Rizal, Laguna, Cavite and Pampanga, the high spot market prices had prompted Meralco to adjust its rates by P4.15 kwh.

However, upon Bayan Muna’s petition, the Supreme Court (SC) issued a 60-day temporary restraining order (TRO), stopping Meralco from collecting the increase.

The SC extended the TRO and subsequently made it indefinite. It is still in effect up to now.

After the ERC found WESM prices to be not rational and reasonable, Meralco revised its rate increase petition, reducing its adjustment from P4.15 to just 45 centavos per kwh, or just a tenth of the original. –-Louella Desiderio (The Philippine Star) with Jess Diaz

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