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WHILE
expressing support to the government’s thrust to lower
power rates in the country, the Private Electric Power
Operators Association (PEPOA) criticized Friday the
government’s push to amend the Electric Power Industry
Reform Act (Epira).
“Amending the law will only distract us from our ongoing
efforts to privatize the National Power Corp. (Napocor)
and National Transmission Corp. and to make our electric
power industry competitive and efficient through
restructuring,” said Ranulfo Ocampo, PEPOA president.
The
PEPOA official said that if the goal is to lower rates,
this may not happen as there is still a dominant player
in the market, pointing at Napocor and Psalm (Power
Sector Assets and Liabilities Management Corp.), which
together still hold more than 70 percent of the market
through its own plants and independent power producers
contracts.
Ocampo
said that real competition would only happen if there
would be enough players and no single player could
control the prices of electricity.
A way to
immediately lower power rates, according to PEPOA, is
for Napocor to pass on to the consumers its savings
brought about by the appreciation of the peso.
“If
reports are accurate, Napocor has foreign exchange gains
of about P78.74 billion in 2005 and P68.74 billion in
2006. If that is true, then the consumers should expect
hefty power rate reductions from Napocor,” said PEPOA.
Under
the Incremental Currency Exchange Rate Adjustment rules
of the Energy Regulatory Commission (ERC), Napocor
should have applied for a rate reduction as a result of
the peso appreciation.
Recently, the implementing rules and regulations (IRR)
of the Epira were amended in order to make pass-through
costs such as forex gains or losses automatic without
the need for tedious public hearings which will take
months, if not years, to finish.
“Through
the IRR amendment, consumers get to immediately benefit
from such gains or losses. Automatic cost adjustments
work both ways. Thus, Napocor’s reported gains can now
be passed on to the consumers if only they will apply
such reductions with the ERC,” said the PEPOA official.
Ocampo
added that any changing of the rules in the middle of
the game would only confuse investors and the
stakeholders.
“In
fact, the government should focus on the recent
successful privatization of the 600-megawatt Masinloc
power plant where it got a hefty price of $930 million,
and this high offer and the presence of six bidders only
show the growing confidence of investors in the
privatization efforts of the government,” he said.
“Introducing changes at this time will only send mixed
signals and may undermine the privatization efforts of
the government.
What is
needed is the political will to pursue the strict
implementation of the Epira. Only then can we hope to
achieve real competition,” said Ocampo. |
