SEIPI seeks suspension of GRAM collection

MANILA, Philippines - The Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI) is seeking the suspension of the generation rate adjustment mechanism (GRAM), a scheme which allows utilities to recover costs relating to fuel and power, during the Malampaya pipeline maintenance shutdown to prevent electricity prices from going up.

“We recommend that adjustment mechanisms such as the GRAM not be collected for this period and that the maintenance proceed as swiftly as possible and are completed before the prescribed 30-day period,” SEIPI said in a statement yesterday.

If the time frame cannot be shortened, the group said the Department of Energy and Energy Regulatory Commission should ensure that there will be a cap on the price increase brought about by the shutdown.

The group noted that the Malampaya shutdown will affect the adequacy of supply as well as create upward pressure on prices of electricity during the one-month period.

“While many of our members that are contestable customers have fixed prices covered by their contracts with their retail electricity suppliers, and will be shielded from an increase in generation costs during the maintenance period, (it is) our non-contestable members that will be severely affected by this shutdown,” SEIPI said.

The Malampaya facility which fuels three gas-fired power stations in Luzon with a combined capacity of 2,700 megawatts, is scheduled to shut down from Nov. 8 to Dec. 8.

The country’s biggest power distributor, Manila Electric Co. (Meralco), earlier warned of higher electricity rates in December until January of next year due to the shutdown of the Malampaya facility.

Meralco said the generation charge, which is a component of electricity bills, may rise by as much as P2 per kwh.

Energy Secretary Carlos Jericho Petilla said consumers will have to pay higher rates because the three power plants have no choice but to use gas.

Meralco said it is working with power companies to prevent an increase in rates.

SEIPI groups foreign and Filipino semiconductor and electronics manufacturing companies with operations here.

The electronics industry is considered the main contributor to the country’s manufacturing sector as it accounted for 43 percent or $22.5 billion of the total Philippine merchandise exports last year.

The industry employs a total of two million workers.