Philexport urged to shed bias in giving status of power industry

The Energy Regulatory Commission (ERC) has urged the Philippine Export Confederation (Philexport), a private sector team tasked to make an action agenda related to power concerns, to remain calm and objective in presenting the status of the electric power industry in the country.

The ERC’s advice is relative to Philexport’s recent claims that, "electricity costs and dwindling generation capacity remain some of the biggest factors that make it harder for people to do business in the Philippines compared to other countries in Asia."

The group attributes the "high power rates" to high generation cost. Moreover, Philexport said that "the National Transmission Corp. was also charging very high rates of P1 a kWh which business leaders believe was based on the rate-setting system that was too much and uncompetitive."

"The ERC would like to update the Philexport on a significant development in the regulatory front. Aside from the fact that the ERC undertakes thorough and in-depth analyses on all cases that cross its path, the ERC is now adopting performance based rate-setting schemes, in lieu of the 80-year old return on rate base (RORB) methodology, that will result in efficiency for electric utilities that will eventually translate to lower rates for consumers," ERC Chairman Rodolfo B. Albano Jr. said.

Albano argued that there are other factors that affect the performance of the export sector.

"A thorough assessment of the problems in the export industry must be done. There may be other factors that beset the export industry," Albano added.

The ERC chief is also requesting Philexport to carefully assess its plan to recommend to President Arroyo to declare a state of emergency "so that the problem will be solved with dispatch."

"Philexport must first establish beyond reasonable doubt that the electric power industry is in a crisis. It must also understand that the industry is in the middle of a reform process. Declaring a state of emergency will only send a wrong signal that the Philippines is incapable of managing change. Let the economic managers of the country do their job," Albano said.

According to Albano, the commission is open to discussing the concerns of the exporters.