FILIPINO businessmen want the players in the power sector to start explaining—in clear and detailed terms—why the country is suffering from “unreasonably high-power rates.”

Donald Dee, chairman emeritus of the Philippine Chamber of Commerce and Industry (PCCI), said the National Power Corp. (Napocor), Manila Electric Co. (Meralco), National Transmission Corp. (Transco) and the Energy Regulatory Commission (ERC) have numerous issues and questions they should answer.

“Now is the time for the energy players to explain to the people the systems, structures, procedures, contracts and processes involved in power generation, transmission and distribution. For decades now, the public has absorbed the high cost of power without having a thorough understanding of the economics of these power players,” Dee said.

Aside from the dissatisfied public, the PCCI said the high cost of power is turning away foreign investors so it is high time that Meralco, Napocor, Transco, ERC and the Department of Energy (DOE) to “sit down, put their heads together and answer the issues with the end goal of bringing the power rates to a competitive level with our neighbors.”

“There is not much time left before investors start veering their sights somewhere else. The energy players must develop a road map that will bring the power rate not only significantly lower but also competitive in the region for businesses to continue to thrive,” Edgardo Lacson, PCCI executive vice president, said.

The group said there is a need to review the existing ‘systems loss’ provisions in the Electric Power Industry Reform Act (Epira) allowing Meralco to recover 9.5 percent of its losses due to pilferage, technical and administrative systems losses.

Losses due to pilferage, Dee said, should not be charged to the consumers, but should be considered as an operating expense by Meralco so as to force it to correct its inefficiencies and improve its patrol mechanism.

“Meralco should explain its side on the issue that it has passed to the consumers its own electric consumption estimated at 72 million kilowatt-hours per year, or roughly worth P450 million. Is this amount compatible with the allowed percentage under the law?,” Dee said.

Meralco, he added, should refund all the overcharges and all the costs that it passed on to consumers.

As for the Napocor-Meralco Settlement Agreement, Dee said “why can’t Napocor and Meralco jointly publish their settlement agreement together with a simple and candid explanation of how it has benefited and will benefit the stakeholders.”

PCCI also suggested that the performance-based rate (PBR) scheme of Transco, which is one of the highest in the region, be scrutinized.

The PBR methodology, the group said, has resulted in increases in the cost of power, instead of supporting the underlying goals of the Epira, which is to promote socioeconomic development and enhance competitiveness.

“It forces consumers to pay increase in rates based on future planned investments, assumed costs, etc. and proposed performance for a period of years. Why should consumers pay now for future or promised investments that have not been realized?” the group said.

The ERC, it said, should also clarify why it approved these rates.

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PCCI wants energy sector to explain rate issues

FILIPINO businessmen want the players in the power sector to start explaining—in clear and detailed terms—why the country is suffering from “unreasonably high-power rates.”

CEBU electricity consumers may soon see the end of their low much talked-about low power rates.

Aboitiz Power Corp. (APC) said it will apply for a rate reset under the performance-based regulation (PBR) of the Energy Regulatory Commission (ERC) for their distribution companies, effectively increasing their power rates by 2010.

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