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SUBIC
FREEPORT—President Arroyo wants a two-step approach to
lowering electricity charges to consumers: the amendment
of the Electric Power Reform Act (Epira) to allow
speedier open access of investors, and the faster
privatization of government power plants.
Energy
Secretary Raphael Lotilla, who stays on until the end of
August, believes another step is necessary, and that is
to free the National Power Corp. (Napocor) from
government restrictions such as the need to go to the
Energy Regulatory Commission (ERC) every time there is a
desired change in the power rates.
He seems
to believe that this is a key move since the government
had already liberalized the generation sector, and yet,
Napocor remains subject to ERC regulation in so far as
setting rates are concerned, putting it out of sync with
the private generators.
In any
case, the President already told Angelo Reyes Jr., who
appeared to be in danger of being rejected by the
Commission on Appointments in replacing Lotilla, to
speed up privatization to hasten the reduction of power
rates.
Speaking
at the Luzon Urban Beltway Infrastructure Conference at
the Subic International Airport, the President also
reiterated her intention to ask Congress to amend the
Epira to spur more competition among power suppliers by
giving them early access to the power sector without
waiting for the required level of privatization that is
70 percent.
“Our
privatization is a little slow so on the one hand, I am
tasking the new Secretary of Energy to make it his
number one priority to speed up privatization,” she
said.
Among
the power plants being privatized is the 600-megawatt
Masinloc coal-fired power plant, the bidding for which
had failed several times, and the Manila thermal power
plant.
Would
Reyes be anymore successful in privatizing these
seemingly jinxed state assets? At least two senators do
not think so.
Administration Sen. Miriam Santiago and opposition Sen.
Jinggoy Estrada separately indicated they would oppose
Reyes’s confirmation.
“He
[Reyes] knows zero about energy,” said Santiago who
expects to retain her seat in the CA as well as her
chairmanship of the Joint Congressional Power
Commission. “As a lawyer acquainted with energy law, I
had to educate myself for three years before I became
familiar with this sunrise industry. I don’t recall that
Reyes shone as a college student or that he has the
making of a polymath, a person who knows everything
about everything.”
Estrada
pointed out this was the “fourth incarnation” of Reyes
as a Cabinet secretary, recalling that Reyes was first
Defense Secretary, then Interior Secretary, then
Environment Secretary, this series “clearly showing”
that “the President was beholden to Reyes for helping
install her in power through his betrayal of former
President Estrada.”
Santiago
described Lotilla as “one of my best students in UP Law
and he performed well on his job as Energy Secretary”
and disputed Malacañang’s claim that Reyes did well in
his previous postings. “If he was doing good in all
those departments, why was he kicked around like a
political football?”
Lotilla,
in expanding on his idea of feeing Napocor, said having
Napocor set rates just like private generators would
actually benefit both Napocor and its customers since it
could automatically increase or reduce rates to reflect
the true cost of generating power. “I think eventually
we will get there,” Lotilla said.
Napocor
president Cyril del Callar earlier said that he also
remains optimistic the ERC will consider adopting the
same rate adjustment arrangements given to private
generation companies in view of the amendments made in
Section 4 (e) of the Epira’s implementing rules and
regulations.
According to del Callar, generation companies are
allowed to adjust rates through the Generation Rate
Adjustment Mechanism (GRAM) and the Incremental Currency
Exchange Rate Adjustment (ICERA) on a quarterly basis
allowing them to recover or to pass on to its customers
expenses or savings incurred in generating electricity.
In
another development, the private Consumer and Oil Price
Watch said the shuffling of key Cabinet posts officials
will not help the government achieve its privatization
goals in power generation and transmission.
Price
watch president Raul T. Concepcion said Thursday he’d
rather that Lotilla was given until the end of the year
to accomplish what needs to be accomplished,
particularly the privatization of the assets of the
Napocor and National Transmission Corp.
He
pointed out Power Sector Assets and Liabilities
Management Corp. officials are touring several countries
to invite investors, “but ultimately, investors again
will adopt a wait-and-see attitude and watch what the
Congress will act on the issues that affect the power
sector between July and September before they determine
whether they will invest or not.”
A bit of
good news—del Callar said consumers can expect further
reductions in the generation charge of 7.49 centavos per
kilowatt-hour in Luzon and 3.04 centavos per
kilowatt-hour in Mindanao by September and November,
respectively.
Since
March this year, according to
del
Callar, there has been a reduction of 59.76 centavos a
kilowatt-hour, 49.87 centavos a kWh, and 28.03 centavos
a kWh in generation charges in
Luzon, the Visayas and
Mindanao, respectively. |
