PCCI backs extension of PEZA power rate discount

MANILA, Philippines - The Philippine Chamber of Commerce and Industry (PCCI) has thrown its support to the clamor of the Philippine Economic Zone Authority (PEZA) for the extension of the privilege of locators in the zones for discounted power rates.

The support does not come free, but with certain conditions. The discounted rates must not be passed on to consumers outside the zone in the guise of universal charges. It must last only until open access shall have been in place by December of next year and a parity in rates must come in with industries outside the zones.

This was made clear by PCCI energy committee chairman Jose Alejandro during the latest committee meeting when executives of Manila Electric Co. (Meralco) informed the committee the transitory supply contract between it and the National Power Corp. (Napocor) is due to end on Christmas day, Dec. 25, 2011.

Meralco officials told the PCCI energy committee that under the expiring contract, zone locators enjoyed generation charges of P4.60 per kilowatt/hour, much cheaper than the average of P5.50 paid by other Meralco consumers today.

The cheap electricity that was supplied the zones within the Meralco franchise area was then assigned to the Ilijan power plant in Batangas owned by Napocor.

That plant has been sold out to private investors. Without power supply to sell, the Power Assets and Liabilities Management (PSALM), the successor state company to Napocor, is no longer in any position to renegotiate the contract.

Any new discounts for locators in the zones will henceforth be given by successor companies that took over the state-owned power plants in Luzon.

Enjoying the discounted rates until Christmas day are 352 companies located in 10 government and privately-run special economic zones that consume 227 million kilowatt/hours a year.

They account for 40 percent of total Philippine exports. Sixty percent of exports are contributed by enterprises outside the zones, mostly small and medium enterprises that will not even be covered by the open access provisions of the power reform law.