Gov’t asked to extend ecozone power rate scheme

Manila Electric Co. (Meralco) stressed the need for the government to continue supporting industries located in the economic zones by helping them deal with the country’s high electricity rates.

Meralco chief operating officer Oscar Reyes made the remark on the sidelines of the Asian Development Bank’s 45th annual meeting on Wednesday, as he noted that the transition supply contract (TSC) between state-run National Power Corp. and Meralco, and the Ecozone Rate Program (ERP) are set to expire in December.

Under the ERP, discounted power rates are given to 632 companies located at the 19 economic zones that are covered by the Meralco franchise.

These companies, according to Meralco, account for 43 percent of Philippine exports worth about $19 billion and provide 222,213 jobs to Filipinos.

Government support is therefore needed considering that the ecozone locators contribute significantly to the Philippine economy, he said.

The TSC and the ERP were supposed to have lapsed on December 25 last year but the Power Sector Assets and Liabilities Management Corp. board had decided to extend them until the end of this year to help boost the competitiveness of local manufacturers.

Reyes admitted that Meralco would find it difficult to match the discounted rates being offered under the ERP, even if its existing power-supply contracts were competitively priced compared to prevailing power rates. The distribution utility has already signed new power-supply agreements for an additional 2,380 megawatts of capacity and which, he said, could help “contain” the country’s high electricity rates.

“I think we, at Meralco, will see what we can do but with what we have seen in our own new power-supply agreements, it will be quite tough to match ecozone rates without subsidy from the government for ecozone locators,” Reyes said.

He, however, pointed out that industrial customers may be able to get good deals as they would soon be allowed to enter into bilateral contracts with power generation companies, when the government starts implementing the open access and retail competition scheme.