ERC orders immediate implementation of electricity rate cut in ecozones

The Energy Regulatory Commission (ERC) ordered yesterday the Manila Electric Co. (Meralco) and the National Power Corp. (Napocor) to immediately implement the P1 per kilowatthour (kwh) reduction in power rates in selected special economic zones and industrial estates.

“I signed a letter authorizing them to implement the special rate for ecozones prior to the submission of their application with the commission,” ERC chairman Rodolfo Albano Jr. said.

This way, he said, the two power firms will be able to carry out the proposed reduction immediately so that “the locators will enjoy it as soon as possible”. 

“The ERC can then issue the proper order when they apply. We want their MOA (memorandum of agreement) to be implemented,” he said.

Meralco and Napocor signed a MOA that would lower power rate by P1 per kwh at 10 industrial estates and three special economic zones. 

The ten industrial estates are Gateway Business Park, Laguna Technopark, Calamba Premier Industrial Park, Carmelray Premier Industrial Park , First Philippine Industrial Park, Laguna Industrial Park, Light Industries Science Park and First Cavite Industrial Estate.

Among the big companies that will benefit from the lower rates are Intel, Texas Instruments, Toshiba and Hitachi .

Meralco president Jesus Francisco said aside from the ecozones and industrial estates, its industrial customers within its franchise area with at least one megawatt in demand and a load factor of 80 percent could also avail of the special rate.

Based on the MOA, the two power firms will lower the generation rate to P3.52 per kwh from the existing P4.69 per kwh.

However, Francisco said if the volume of power sourced by the companies goes up to a certain level, the generation rate can further go down to P3.49 per kwh to P3.46 per kwh. 

Based on preliminary estimates, this could result to a substantial savings of P1.17 per kwh to the industrial users. 

“We’re hoping that this low rate will encourage everyone to consume. Christmas has come early for industrial customers,” Francisco said. 

Semiconductor and Electronics Industries of the Philippines (SEIPI) president Ernie Santiago, said this is a welcome development as this may result to a 20 percent reduction in power rates for industrial users.

Santiago said the industries have been waiting for this kind of initiative from both the government and private sector to help big industries and exporters to be more competitive in the wake of the peso’s appreciation.

“The share of power costs to our total cost is 10 to 25 percent. A reduction of 20 percent in power cost will make vs more competitive,” Santiago said.