Aquino pressed for roadmap vs power rate hike

MANILA, Philippines – Major players from key industries in the Philippines have rallied together calling on President Benigno Aquino III to lay down a roadmap that will stem the rising cost of electricity in the country.

Officials from the Philippine Exporters Confederation (PEC), the Philippine Chamber of Commerce and Industry (PCCI), the Philippine Steelmakers Association (PSA), the Foundation for Economic Freedom (FEF), UP National Engineering Center, the Trade Union Congress Party (TUCP), and the Associated Labor Unions-TUCP, said in a joint statement that “there appears to be no specific and strong action program or roadmap coming from the Executive department.”

“We ask the Aquino administration to bring power rates down,” said TUCP partylist Representative Raymond Democrito C. Mendoza.

Attorney Aniano Bagabaldo, external vice president and chief operating officer of  PEC, said “We have the highest power rates in Asia” and cited figures from the Department of Energy (DoE) stating that energy rates in the Philippines were 24 cents per kilowatt hour in contrast to Thailand and Malaysia, which have eight and seven cents per kilowatt hour respectively.

This has led to the high cost of doing business in the Philippines and has also been “the biggest disincentive to the entry of new foreign direct investors to our shores” he added.

Gerard R. Seno of the Associated Labor Unions called on President Aquino to “make the necessary bold policy interventions” to “confront this potentially worsening problem affecting millions of workers.”

Among the proposals they have put forward was for President Aquino to suspend and review all pending power rate increase petitions in the Energy Regulatory Commission (ERC).

They are also calling for drastic changes in the ERC saying that it has “failed to protect the interest of ordinary workers and consumers against the greed of powerful industry players” when it implemented a “Performance-Based Rate” (PBR) formula.

The PBR allows electricity distributors to file a petition to increase prices when it meets certain performance criteria such as faster line collections and quick response to client’s problems, among others. This makes it relatively easy for them to raise prices for their good performance, when they are required to perform good in the first place anyway, they said.

TUCP Representative Mendoza recommended the scrapping of the PBR and to revert to the Return-on-Rate-Base (RORB) which limits the electricity distributor’s returns to 12%.

The members of the conference also recommended that some high-cost renewable energy programs such as solar, wind, and ocean be deferred and instead focus on cheaper ones such as biomass, geothermal and hydro. Some renewable energy sources costs high because the technology is still new and expensive to produce they said.

Energy Chairman of PCCI, Jose Alejandro said, “We are the highest in the world” when it comes to renewable energy production. Currently 34% of our energy production comes from renewable energy.”

Other recommendations are the review of the Wholesale Electricity Spot Market (WESM) to restrain generation charge increase.