MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) said Congress and other government agencies also play a vital role in lowering power rates.
PSALM president Emmanuel Ledesma made this statement in response to criticisms that the agency has failed to meet its goal of bringing down electricity costs.
“It does not appear in the EPIRA (Electric Power Industry Reform Act) that privatization by itself was intended to result in reduced power rates. Other reforms must also be undertaken by Congress and other government agencies,” he said.
He stressed that there are other factors that would contribute to lowering electricity cost, not just the privatization process of National Power Corp. (Napocor) assets.
“The privatization process has been ongoing for 10 years since the enactment of the Electric Power Industry Reform Act (EPIRA) in 2001, and it has successfully diversified the ownership of Napocor power plants consistent with PSALM’s mandate under the EPIRA. The privatization of government assets is only part of the reform framework provided under the law, which seeks to achieve reasonable power rates in the country,” he said.
He noted that other specific measures to reduce electricity rates are also provided in the law, such as zero-rating of VAT use of excess universal charges collected reduction of rates of power from indigenous sources removal of inter-grid and intra-grid cross subsidies and other similar measures.
The PSALM official said the condonation of loans of electric cooperatives, which was already undertaken by PSALM, should have also resulted in lower rates charged by the electric cooperatives concerned.
Earlier, House Deputy Speaker Lorenzo R. Tañada III’s warned of more escalations in the cost of electricity as certain players in the power sector have allegedly been engaging in questionable sales and bidding of power plants with PSALM.