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BUSINESS and labor groups want the Philippine government to come up with a national road map to achieve electricity supply stability and bring down what are the highest power rates in Asia.
In a briefing, Francis Chua, president of the Philippine Chamber of Commerce and Industry (PCCI), said the government lacks a specific and strong action program to address the concerns, which have been hurting exporters, manufacturers and metal producers.”The public would like to know the road map so we can support it and so we can figure out how we can add value to the road map,” said Chua.
Data from the Department of Energy showed that Filipinos are paying $0.24 per kilowatt hour in contrast to Thailand’s $0.08 and Malaysia’s $0.07
Among the proposals of PCCI, Philippine Exporters Confederation, Philippine Steelmakers Association, Trade Union Congress of the Philippines (TUCP) and Foundation for Economic Freedom is the creation of a single power purchaser that will resell to utilities at a nominal mark-up of at least P0.02 per kilowatt-hour.
The groups are also calling for a review of the wholesale electricity spot market design to restrain generation charge increases, such as applying the net pool or balancing market system in the dispatching protocol instead of the current gross price basis.
TUCP called for the reclassification of generation companies as public utilities, adding these entities must be subjected to return-on-rate base ceilings of 12 percent in their computation of net income.
The labor group denounced the performance-based rate formula of the Energy Regulatory Commission. The PBR allows a distribution utility or electric cooperative to file a petition for a rate hike after meeting certain performance criteria such as good management practices and efficient systems and operations.
While the PCCI strongly supports renewable energy, it is objecting to the imposition of feed-in-tariffs and instead pushed for allocation of renewable energy directly to households.
High prices have already taken their toll on the country’s exports, putting its overall export targets in peril, said Aniano Bagabaldo, Philexport executive vice president and chief operating officer.
Under its plan, Philexport projected a bold target of doubling exports from $52 billion to $120 billion by 2016, basing its trajectory on stable power supply and competitive rates.
Bagabaldo warned that when power rates get too prohibitive, micro, small and medium enterprises, which make up 98 of every 100 Philexport members, may no longer be viable because electricity accounts for up to 30 percent of their monthly operating costs.
Realizing the 10-percent export growth target of the Export Development Council may be “extremely hard” for its members, Bagabaldo said, after actual exports grew by only 3.3 percent in the first seven months compared with the 26-percent growth in the same period last year.
The steelmakers group said they have been carrying the heavy burden of high power costs, forcing them to directly connect with independent power producers, to import products in lieu of local production, or to put up their own power plants.
“It is not enough to say that our neighbors pay less for power, but what is important is that their governments acknowledge the strategic importance of the power sector and hence provide what is necessary to ensure that the rates are competitive and the supplies are sufficient,” said David Chua, PSA president.