Consumer groups back bid for lower electricity rates

Two consumer organizations are backing a proposal for competitive bidding for the supply of electricity to bring down power rates in the Philippines, which has the highest electricity cost in Asia.

The National Association of Electricity Consumers (Nasecore) and the Matuwid na Singil sa Kuryente Consumer Alliance (MSK) said the competitive selection process proposed by the Department of Energy (DOE) was the first proposal for auctioning off contracts in the power sector after the Electric Power Industry Reform Act (Epira) allowed cross-ownership in generation and distribution that made the industry prone to abuse.

“If this is implemented, we will see power rates in the country decline, and consumers will benefit,” Nasecore president Pete Ilagan said in an interview.

“We’re happy that the policy emanated from the DOE, but we want to see the Energy Regulatory Commission implement this,” he said.

The new policy, a brainchild of former Energy Secretary Carlos Jericho Petilla, is aimed at bringing down the cost of electricity and ensuring transparency in supply procurement.

“This is the first time this is happening. It is the answer to the cross-ownership provision of Epira,” Ilagan said.

Under Department Circular No. DC2015-06-0008, all power distributors must conduct a competitive bidding for power supply contracts, a shift from the current bilateral arrangements.

The DOE said competitive bidding for contracts between distributors and producers would ensure stable power costs and benefit consumers.

Toward this end, distributors are required to make the procurement transparent in order to reduce risks, and promote and instill competition for electricity supply.

David Celestra Tan of the MSK and founder of the Philippine Independent Power Producers Association (Pippa) said 15 years since the passage of Epira, it was only now that the government was taking steps to protect consumers.