Meralco urged to cushion impact of power rate hike

Energy Secretary Vincent S. Perez urges the Manila Electric Co. (Meralco) to come up with measures to cushion the impact of an increase in power rates.

"Meralco should also help. They should follow the changes we in the government are going to initiate. The National Power Corp. (Napocor) is already tightening its belt. It has already lessened the number of its workforce. We are calling on Meralco to help us," Perez said in a radio interview.

Perez said the higher power rates form part of the overall restructuring scheme being undertaken in the power sector.

"We are faced with a problem that needs to be resolved now even though there is only little time left to do it. We need to get rid of Napocor’s debt by privatizing immediately its power plants. The proposed rate hike is necessary in order to attract investors into the power sector. Each of us should make sacrifices," Perez said.

According to Perez, the Lopez-controlled power firm should also draw up plans to lessen the impact of the proposed power rate increase now pending before the Energy Regulatory Commission (ERC).

The energy chief said Napocor which is saddled with a P500 billion debt, is expected to end the decade with a whopping P1 trillion debt if no bold measures are undertaken now.

"At the end of the decade, we want to see a reformed power sector. We just need to make sacrifices for about two years. If not, Napocor would be burdened with a huge debt," Perez said.

Napocor president Rogelio Murga, earlier, said that the power rate increase will enable them to maintain the viability and operation of the power firm as the government tries to invite investors to take a look at its power plants.

"With this attractive rate adjustment, maybe investors will come and build power plants and mitigate the crisis that is expected by 2008," Murga said.

Napocor’s net loss in 2003 has widened to P100 billion as against the previous year’s P33.7 billion. Last year’s losses exceeded its own projection of P75 billion, and nearly surpassed its estimated deficit for this year of P115 billion.