Sunday, September 25, 2011

P-Noy urged to address power rate hikes

By Mike Frialde (The Philippine Star) Updated September 24, 2011 12:00 AM

MANILA, Philippines - Labor, academe and industry groups yesterday urged President Aquino to prioritize the issue of escalating power rate increases.

The groups led by the Philippine Chamber of Commerce and Industry (PCCI) met in Makati City and signed a joint statement urging the President to craft a roadmap towards power rate competitiveness and supply stability.

“There appears to be no specific and strong action program or roadmap coming from the executive department and made known and shared with the private sector,” they said in their joint statement.

Joining the PCCI in its call are the Philippine Exporters Confederation (PEC), the Philippine Steelmakers Association (PSA), the Foundation for Economic Freedom (FEF) and the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP).

The groups also called for the scrapping of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA), which they said was not able to meet its promised results since its enactment on June 8, 2001.

“All attempts of revising or amending the EPIRA over the last 10 years have not succeeded because of the interplay of its internal weakness and the lobby of conflicting interests among stakeholders,” the groups said.

They said the data from the International Energy Council showed that in 2009, the country’s industrial electricity rate of $13.2 was highest not only in the region but also higher than the Netherlands, the US, Australia, France and Sweden.

Ranking higher than the Philippines at that time were Italy, Germany, Singapore and the United Kingdom.

“This situation has definitely not improved,” the groups said.

They also warned that if the executive does not take action to control the escalating power rate, the country could experience “energy poverty” and trigger an eventual call for wage increase.

“(This) is the result of taking away food from the table of the poor and labor on account of power cost,” they said.

To curb power rate escalation, the multi-sectoral group proposed that the executive department direct the Energy Regulatory Commission (ERC) to stop or defer from hearing any petition for a power rate increase.

The group also called on the President to conduct a “strip and build” analysis of the country’s power cost and decide how to bring it to a competitive level by eliminating certain cost burdens.

The group also suggested that government defer the implementation of any high-cost renewable energy project such as those using solar, wind and ocean power and instead focus on cheaper alternatives such as biomass and river hydroelectric sources.

Meanwhile, the ALU-TUCP has warned of a possible large-scale workers’ protest for higher wages should the President fail to respond quickly to the issue of rising electricity costs.

“As we speak today, 11percent of the total monthly income of toiling Filipino workers goes to their electricity bills. The increasing electricity costs are eating away the family budget for food, medicine, decent shelter, and education for their children. This is compounded by the inflating daily wage amount caused by rising costs of basic services and commodities,” said Gerard Seno, ALU-TUCP national vice president.

“If these issues are not acted upon soon, workers will be forced to demand for higher wages or demand answers on the streets. This is a very serious issue for workers that must be responded to amid these very difficult times. The time for President Aquino to act is now,” he added.

FDC hits ERC

Meanwhile, Freedom from Debt Coalition (FDC) secretary-general Milo Tanchuling asked the ERC yesterday to stop the “indexation” or pegging of the prices of natural gas and geothermal steam to the international prices of oil and coal, respectively.

“This indexation makes the prices of electricity generated using natural gas and geothermal steam become higher, not to mention becoming vulnerable to price fluctuations in the world market for oil and coal,” Tanchuling said.

For the last 10 years, the FDC had been opposing the privatization of the power industry and has been pushing for stronger industry regulation and campaigning against high electricity rates.

The FDC is a national coalition of more than 200 non-government and people’s organizations advocating people-centered economic development.

Tanchuling also sought feedback on the seven-page proposal entitled “Declaration of Unities and Action Points” that the FDC submitted to the ERC two weeks ago to address the problems besetting the electric power industry.

The declaration was the output of the FDC-sponsored “National Power Summit” held last June 25-26 in Quezon City which contains a long list of proposals on renewable energy; debts of the National Power Corp.; reduction of power rates; making power industry more efficient, reliable and secure; regulation; and women under power privatization and the regime of EPIRA.

“We believe that the ERC’s version of performance-based rate methodology is unfair and unjust to consumers. Instead of increasing the efficiency and lowering the tariffs that commonly follow the implementation of performance-based rate in other countries, those of local distribution and transmission utilities have been increasing at an average of 63 percent and 40 percent, respectively, in the Meralco franchise area,” Tanchuling said.

He said aside from its traditional rate and service regulation functions, one of the two primary responsibilities of ERC is to ensure consumer education and protection. – Jose Rodel Clapano

Action sought on power rate

Monday, September 26, 2011
CEBU CITY -- Defer everything in the pipeline that could result in another power rate increase, five organizations appealed to the Aquino administration.
The groups, which included exporters, business owners and a party-list organization, asked why addressing the "very high" power rates does not seem to be a priority for the administration, which left it out of its Legislative-Executive Development Advisory Council (Ledac) concerns.
"There appears to be no specific and strong action program or road map coming from the executive department" to address rising power rates and supply problems in Mindanao, said their joint statement.
The five are the Philippine Chamber of Commerce and Industry, the Philippine Exporters Confederation, Philippine Steelmakers Association, Foundation for Economic Freedom and Trade Union Congress of the Philippines (TUCP) party-list.
"If power rates are left alone to escalate, then we shall surely create what the United Nations describes as 'energy poverty', which is the result of taking away food from the tables of the poor and labor, on account of power costs," they said in their joint statement.
"This could trigger an eventual call for a wage increase."
The Associated Labor Unions (ALU) estimated that some 11 percent of the total monthly income of Filipino workers is used to pay for power bills.
"The increasing electric costs are eating away the family budget allotted for food, medicines, decent shelter and education for their children," said an ALU-TUCP statement sent to Sun.Star Cebu.
It asked President Benigno Aquino III to "make politically difficult decisions", starting with asking the Energy Regulatory Commission to suspend all pending petitions for a power rate increase.
The five groups' joint statement recommended, among others, asking the national grid and power distributors to reduce systems losses by three percent or more.
It also recommended speeding up the transfer of two power barges in the Visayas to Mindanao "to affect power supply relief in the region in about 24 months, instead of the current non-solution status."
It asked the government defer any "high-cost" renewable energy program—such as solar, wind and ocean—and to focus instead on cheaper ones like biomass and "run-of-river hydro."
Department of Energy Visayas Director Antonio Labios could not be contacted for comment Sunday.
The groups asked for "direct and urgent national leadership intervention" so that worries about rising power rates or inadequate reserves can be addressed.
They added the Electric Power Industry Reform Act (Epira) has not produced good results since it became a law 10 years ago.
Higher rates
The groups behind the statement represent business, workers and representatives from the academic and finance communities.
"It is not often that these sectors meet, argue, discuss and come to a common platform that needs urgent attention from national leadership and calling for a clear and well-thought-of action program that everyone can count on and must aggressively support," the statement said.
The groups said that as early as 2009, quoting data from the International Energy Council, the Philippines' industrial electricity rate was the highest not only in the Asia Pacific region, but also in the Netherlands, United States, France and Sweden.
The residential electricity rate is likewise higher than that in most countries, except Germany, Italy, Sweden and the Netherlands, they said.
Last September 23, House Deputy Speaker Lorenzo "Erin" Tañada warned of higher rates for electricity, given "questionable" sales of power plants by the Power Sector Assets and Liabilities Management (Psalm) Corp.
Tañada said he received reports about alleged anomalies in the disposal of power assets by Psalm, a government-owned company created under the Epira to handle the privatization of government power plants. (EOB of Sun.Star Cebu)
Published in the Sun.Star Cebu newspaper on September 26, 2011.

Groups draft proposals to cut power rates

Creation of central clearinghouse for utilities pushed

8:34 pm | Friday, September 23rd, 2011

The business, academic and labor sectors have teamed up for the first time to submit to the government a proposal to reduce electricity rates and ensure stable power supply.
The Philippine Chamber of Commerce and Industry, the Philippine Exporters Confederation, the Trade Union Congress of the Philippines and the Foundation for Economic Freedom gave 10 recommendations to arrest escalating power rates and four key suggestions to ensure supply security.
In the area of rate reduction, the joint proposal stated that any pending rate increase petitions be deferred. Instead, industry stakeholders should do a “strip and build” analysis of current power costs “and make hard decisions on how to bring it to competitive levels.”
The groups said certain cost burdens should be eliminated, reassigned elsewhere or deferred.
The state-run Power Sector Assets and Liabilities Management Corp. should also defer the collection of the National Power Corp.’s stranded debts and consider other possible options for recovery, including tucking this into the national budget and spreading payment over five to six years.
The government should also strengthen the capability of the Energy Regulatory Commission by giving it fiscal autonomy as well as review the merits of the current performance-based, rate-making methodology.
The groups likewise called for the creation of a “government single power purchaser” that would act as a central clearinghouse from which distribution utilities would buy their power supply at a premium of 2 centavos a kilowatt-hour.
“This would be a new entity. Its presence would eliminate gaming in the industry and ensure competition,” said PCCI energy committee chair Jose Alejandro.
PCCI president Francis Chua added that this scheme would allow the government to ensure that prices were not dictated by investors to the detriment of consumers.
The government should also defer adding more burden to consumers through the feed-in tariff rates for renewable energy.
“The FIT will add to the cost of production and result in as much as P9 billion in additional burden to investors. We have to be more competitive,” said Ernest Leung, treasurer of the Foundation for Economic Freedom.

Business groups hit energy policy

Businesses seek govt power sector road map

Gov’t asked to address power issues

Top Story

Posted on September 23, 2011 06:47:14 PM

Gov’t asked to address power issues

PRIVATE SECTOR groups on Friday urged the government to address continuing power rate hikes and an impending electricity shortage, claiming that existing laws and current policy have failed to serve consumer interests.

"There appears to be no specific and strong action program or roadmap coming from the Executive department and made known and shared with the private sector, that is specifically addressing the major concerns ... of escalating power rate increase and pending base load and reserve deficiency in Luzon and the crisis in Mindanao," Philippinc Chamber of Commerce and Industry, Inc. (PCCI) President Francis C. Chua said at a press conference.

A joint statement issued during the briefing was signed by the PCCI, Philippine Exporters Confederation, Philippine Steelmakers Association, Foundation for Economic Freedom, and the Trade Union Congress of the Philippines.

As of 2009, they claimed, industrial and residential power rates in the Philippines were higher than in developed countries. The promise of cheaper power under the Electric Power Industry Reform Act (EPIRA), they added, has yet to be realized a decade since the law’s approval.

To address the issue of power rates going up, they urged the following:

• a halt to pending increases and a "strip and build" analysis of power costs where certain costs can be reassigned or deferred;

• put off charging the Power Sector Assets and Liabilities Management Corp.’s stranded costs and consider funding this via the national budget;

• create a "Government Single Power Purchaser" that will conduct auctions and resell electricity at a nominal two-centavo per kilowatt-hour markup;

• give the Energy Regulatory Commission (ERC) limited fiscal autonomy;

• review the performance-based rate-setting mechanism;

• review the design of the Wholesale Electricity Spot Market;

• defer high-costs renewable energy programs;

• focus the direction of the Renewable Energy Board to evaluating RE development;

• review the imposition of membership contributions to the capital component of tariffs charged by power cooperatives; and

• evaluate the benefit of registering the country’s 119 power cooperatives with the Cooperative Development Authority.

Officials particularly pointed to the feed-in tariff (FiT) policy under the renewable energy program, calling it misguided and claiming that it fails to address the fundamental issue of expensive electricity.

"We should be smart enough to wait for the technology to develop and be practical with our decisions. [Foreign groups] are pushing for this [FiT scheme] because of supplier-driven interests. Why are we looking into solar power, when biomass, for example, is so much cheaper?" said Ernest C. Leung, Foundation for Economic Freedom treasurer and a former Finance secretary.

To address supply issues, meanwhile, the private sector groups recommended:

• auctioning off the Agus and Pulangi hydropower plants and accelerating the transfer of two power barges from the Visayas to provide relief to Mindanao;

• accelerate the connection of some island grids to the national grid;

• create additional reserves via an "Anti-electric Power Line Disturbance Order" and imposing at least a 3% reduction in the allowable system loss; and

• that the Energy department use EPIRA provisions to conduct public supply auctions.

Malacañang, they said, should move to "achieve leadership integration" among key players such as the Energy and Finance departments, ERC and the Joint Congressional Power Commission.

Friday, September 23, 2011

Mataas na singil sa kuryente sa bansa, iprinotesta ng mga negosyante at manggagawa

Posted: 7:44 PM  09/23/2011
Nagsanib-pwersa ang mga negosyante, academe at manggagawa para kalampagin ang gobyerno sa mataas na singil sa kuryente.

Sa joint statement ng mga negosyante, Trade Union Congress of the Philippines (TUCP) at Foundation for Economic Freedom (FEF).

Kulang daw sa aksyon at direksyon ang gobyerno kung paano solusyunan ang mahal na singil sa kuryente.

Ayon kay David Chua, pangulo ng Philippine Steelmakers Association, kailangan nang pababain ang singil sa kuryente.

Sinabi naman ni Francis Chua, pangulo ng Philippine Chamber of Commerce and Industry (PCCI), huwag nang itaas pa ang kasalukuyang power rate na pinakamahal na sa Asya.

Babala naman ng TUCP, hihirit sila ng umento sa sweldo kapag tumaas pa ang singil sa kuryente.

Inihayag ni TUCP Partylist Representative Raymond Democrito Mendoza na hindi lang negosyo ang apektado kundi pati ordinaryong manggagawa dahil P1,200 hanggang P1,400 ang nakakaltas sa kanilang sweldo para ipambayad sa kuryente.

Pero depensa ng Department of Energy (DOE), inaayos na nilang dumami pa ang mga planta para lumakas ang suplay, wala nga lang silang kontrol sa presyuhan ng kuryente. Report from Alvin Elchico, ABS-CBN News

Aquino pressed for roadmap vs power rate hike

6:04 pm | Friday, September 23rd, 2011

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.