President Arroyo enacted yesterday the power sector reform bill but conceded the new law could still stand "some improvements" to ensure consumer protection and further level the playing field.
In her speech prior to the signing of Republic Act 9136, or the Electric Industry Act of 2001, the President said she had directed newly appointed Energy Secretary Vicente Perez to conduct public hearings to determine the additional safeguards necessary to bring down power costs.
"I believe these are valid concerns. Many of our countrymen and even some of the legislators who voted for this new law believe it can still stand some improvement," she said.
The Electric Industry Act aims to restructure the country’s inefficient power industry and privatize the debt-ridden National Power Corp. (Napocor).
Languishing six years in Congress prior to its ratification, the measure is meant to open the power sector to more foreign investments, prevent future power shortages and bring down power rates, which are among Asia’s highest.
Mrs. Arroyo told legislators gathered during the law’s signing ceremony at Malacañang that she expects their support in case the newly enacted law indeed requires revisions.
"I hope you will indulge me if I certify some amendments to the law as urgent," she said.
The power bill, along with the P10.9-billion supplemental budget for 2001, was signed by the President, in the presenceof outgoing Senate President Aquilino Pimentel Jr. and Speaker Feliciano Belmonte Jr. and the principal authors and sponsors of the two measures.
Mrs. Arroyo noted that controversial bill took nine years, three administrations and two Congresses to be passed into law.
"This administration has ensured that the work done to push the bill would not come to naught. This law should prove that when the interest of the Filipino people is at stake, Congress and the executive branch will readily set aside politics and join hands to benefit our people," the President said.
The House of Representatives ratified the landmark measure last week before the end of a special four-day session called for by Mrs. Arroyo. The Senate, on the other hand, approved the measure at the resumption of regular sessions last Monday.
The new law will immediately provide for a 30-centavo per kilowatt-hour reduction in power rates for residential users. It will allow Napocor to auction off its generating assets, which is expected to fatten government coffers by some $4.5 billion.
Mrs. Arroyo pointed out the annual P38-billion subsidy that the national government provides to Napocor can soon be channeled to finance either 115,000 new classrooms or construct 76,000 low-cost homes.
Critics of the power bill had vigorously opposed the provision that requires the government to absorb $4 billion of Napocor’s $6-billion debt to facilitate its privatization. The government argued it could
not sell the power firm if it isn’t relieved of most of its debts.
New Finance Secretary Jose Isidro Camacho told reporters yesterday the new law will also pave the way for the release of some $950 million in multilateral loans.
Perez replaced Camacho as energy secretary after the latter took over the finance portfolio vacated by now Executive Secretary Alberto Romulo. The three Cabinet men were sworn into office by Mrs. Arroyo yesterday following the signing ceremony.
He said the oversight function of the joint congressional power commission would guarantee complete transparency in the privatization of Napocor and other related activities in power restructuring.
The commission will be headed by the chairmen of the energy committee of the two chambers and will have six additional members from each chamber, to be designated by the Senate president and the House speaker.
It has the power to require the Department of Energy, the Energy Regulatory Commission, the National Electrification Administration, the Transmission Company, generation companies, distribution utilities, suppliers and other electric power industry participants to submit reports and all pertinent data relating to the performance of their respective functions in the industry.
The activation of the commission, however, may be a little delayed with the removal of the P22.5-million supplemental budget of the Senate. This amount was supposed to fund the operations of the commission.
Sen. Sergio Osmeña III objected to the inclusion of the P22.5 million and the Senate leadership decided to shelve it rather than jeopardize the passage of the P10.9-billion supplemental budget.
Pimentel expressed hope that the passage of the measure into law would pave the way for a more efficient power sector and cheaper electricity. He cited the automatic reduction of power rates by 30 centavos per kilowatt-hour the moment the law takes effect.
He is also confident that the power rates would not go the way of the water rates that initially went down, only to go up in a matter of months.
Earlier, Sen. John Osmeña, chairman of the Senate committee on energy, refused to predict how the power rates would go in the long run. Osmeña said that there are many variables involved in determining power rates, including interest rates, cost of fuel, foreign exchange and demand.
"We need to upgrade the quality of government service through training, recruitment and better pay," Mrs. Arroyo said.
The supplemental budget was approved by the House of Representatives during their four-day special session last week while the Senate ratified it before the 11th Congress ended the other day.
Out of the P10.9 billion, P3.8 billion will cover the five percent salary adjustment.
The bulk of the supplemental budget will cover salary deficiencies with some P4.15 billion to be used for the pay of teachers hired last year. Some P1.45 billion will cover the second installation of the salary increase to Philippine National Police personnel.
In her speech prior to the signing of the supplemental budget and the new power law, the President thanked the leaders and members of the 11th Congress, which passed some 400 new laws during three years of sessions.
"These last two laws to be signed are testament to the sincerity and the political will of both the legislative and the executive branches," she said. – With Efren Danao