Aquino urges review of power rate hike in Visayas

MACTAN CITY, Philippines – President Benigno Aquino III on Friday expressed doubts about the power rate increase that the Energy Regulatory Commission had recently approved for implementation in the Visayas, and said that a review of the decision was in order.

“We are not sure that the increase is warranted,” Aquino told leaders of the electronics industry that attended the 17th World Electronics Forum here. He said both the executive branch and Congress would make representation with the ERC to propose a review of the 60.60-centavo power rate adjustment it had imposed on power consumers in the Visayas.

The President made the remarks a week after he told stakeholders in the Mindanao power industry that consumers there have to pay a little more in exchange for a steady and sustainable supply of electricity.  Mindanao has been in the grip of brownouts because of limited power supply in recent weeks.

“Congress first, then also the Executive [branch] will be making appropriate representations with the ERC to review this particular decision,” the President added.

Aquino indicated that the review was the short-term approach to the increase in power rates in the Visayas. He also expressed support for amendments to the Energy and Power Industry Reform Act.

“The law that created the ERC is about 10 years old. It is actually the subject of various proposed amendments and has not yet achieved the start of the wholesale electronic spot market which is supposed to actually bring down the prices of electricity,” the President said. “We are trying to accelerate that whole process. We are also encouraging more power generating companies to set up their plants,” he added.

The administration is of the position that an increase in the number of power producers would drive down the price of electricity. It has proposed increased private sector participation as a solution to the power shortage that has resulted in intermittent brownouts in Mindanao in recent weeks.

“We have changed the way power is generated in this country. I’m not happy with the pace [of improvements in the power industry] … so we will accelerate that process,” the President said.

“We are cognizant of the fact that the price of electricity in this country is a major deterrent to further investments and we are trying to accelerate the process where the benefits under the Epira law will be realized the soonest, so that we can have a more competitive electricity rate structure within the country,” the President told the electronics stakeholders.

A recent World Bank report cited high power rates as one of the reasons why the economic gains made by the Aquino administration have yet to be fully felt by most Filipinos.

While indicating support for the privatization of power assets in Mindanao as mandated by the Epira, Mr. Aquino also said that the executive branch was in favor of reviewing the Epira. He said a council of stakeholders would have to review the rate increases to ensure that they remain reasonable.