Gov’t urged to solve power issues before 2015

MANILA, Philippines—The government should address power rate and supply issues before the Association of Southeast Asian Nations becomes an integrated economic bloc by 2015, to enable local industries to remain competitive against its peers in the region.

According to Philippine Steelmakers Association president David Chua, it would be difficult for most industries to be competitive once tariff barriers are brought down if electricity rates would continue to be as high as they are now.

“How can we compete with imported products? Power accounts for about 40 percent of our operational expenses. The government has to come out with out-of-the-box solutions to this problem,” he said. “The clock is ticking. By 2015, we have to be ready to compete in an integrated regional market.”

Chua said industries had been carrying the burden of high power costs for years, with many of them forced to resort to some capital-intensive solutions to stem their ever-increasing power expenses.

Many big power users, Chua said, had opted to stop relying on grid-based power for their electricity requirements. Some had chosen to be directly connected to power producers, while others had decided to have embedded generators.

Both direct connection and embedded generation were very expensive to implement, he said, but many industrial power users had chosen to take these paths to reduce their power costs and ensure their supply.

If the government would not act now, he said it would be difficult for local industries to compete with their neighbors in the future.

“Other governments acknowledge the importance of the power sector, so they provide adequate support to the industry. We need to come up with solutions now,” Chua said.

Philippine Chamber of Commerce and Industry energy committee chairman Jose Alejandro urged the government to come out with a clear power industry roadmap for the next five years to address all possible concerns while there was still time.

Alejandro said the private sector was ready and willing to cooperate with the government on fine-tuning and implementing this roadmap.

“We need to know what their plans are so we can support them and possibly add value to (the roadmap),” he said.

For the government’s part, Energy Secretary Jose Rene Almendras said the government roadmap was still hinged on the implementation of retail competition and open access, which were designed to increase competition in the electricity market and eventually cause rates to go down.