P-Noy urged to address power rate hikes

MANILA, Philippines - Labor, academe and industry groups yesterday urged President Aquino to prioritize the issue of escalating power rate increases.

The groups led by the Philippine Chamber of Commerce and Industry (PCCI) met in Makati City and signed a joint statement urging the President to craft a roadmap towards power rate competitiveness and supply stability.

“There appears to be no specific and strong action program or roadmap coming from the executive department and made known and shared with the private sector,” they said in their joint statement.

Joining the PCCI in its call are the Philippine Exporters Confederation (PEC), the Philippine Steelmakers Association (PSA), the Foundation for Economic Freedom (FEF) and the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP).

The groups also called for the scrapping of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA), which they said was not able to meet its promised results since its enactment on June 8, 2001.

“All attempts of revising or amending the EPIRA over the last 10 years have not succeeded because of the interplay of its internal weakness and the lobby of conflicting interests among stakeholders,” the groups said.

They said the data from the International Energy Council showed that in 2009, the country’s industrial electricity rate of $13.2 was highest not only in the region but also higher than the Netherlands, the US, Australia, France and Sweden.

Ranking higher than the Philippines at that time were Italy, Germany, Singapore and the United Kingdom.

“This situation has definitely not improved,” the groups said.

They also warned that if the executive does not take action to control the escalating power rate, the country could experience “energy poverty” and trigger an eventual call for wage increase.

“(This) is the result of taking away food from the table of the poor and labor on account of power cost,” they said.

To curb power rate escalation, the multi-sectoral group proposed that the executive department direct the Energy Regulatory Commission (ERC) to stop or defer from hearing any petition for a power rate increase.

The group also called on the President to conduct a “strip and build” analysis of the country’s power cost and decide how to bring it to a competitive level by eliminating certain cost burdens.

The group also suggested that government defer the implementation of any high-cost renewable energy project such as those using solar, wind and ocean power and instead focus on cheaper alternatives such as biomass and river hydroelectric sources.

Meanwhile, the ALU-TUCP has warned of a possible large-scale workers’ protest for higher wages should the President fail to respond quickly to the issue of rising electricity costs.

“As we speak today, 11percent of the total monthly income of toiling Filipino workers goes to their electricity bills. The increasing electricity costs are eating away the family budget for food, medicine, decent shelter, and education for their children. This is compounded by the inflating daily wage amount caused by rising costs of basic services and commodities,” said Gerard Seno, ALU-TUCP national vice president.

“If these issues are not acted upon soon, workers will be forced to demand for higher wages or demand answers on the streets. This is a very serious issue for workers that must be responded to amid these very difficult times. The time for President Aquino to act is now,” he added.

FDC hits ERC

Meanwhile, Freedom from Debt Coalition (FDC) secretary-general Milo Tanchuling asked the ERC yesterday to stop the “indexation” or pegging of the prices of natural gas and geothermal steam to the international prices of oil and coal, respectively.

“This indexation makes the prices of electricity generated using natural gas and geothermal steam become higher, not to mention becoming vulnerable to price fluctuations in the world market for oil and coal,” Tanchuling said.

For the last 10 years, the FDC had been opposing the privatization of the power industry and has been pushing for stronger industry regulation and campaigning against high electricity rates.

The FDC is a national coalition of more than 200 non-government and people’s organizations advocating people-centered economic development.

Tanchuling also sought feedback on the seven-page proposal entitled “Declaration of Unities and Action Points” that the FDC submitted to the ERC two weeks ago to address the problems besetting the electric power industry.

The declaration was the output of the FDC-sponsored “National Power Summit” held last June 25-26 in Quezon City which contains a long list of proposals on renewable energy; debts of the National Power Corp.; reduction of power rates; making power industry more efficient, reliable and secure; regulation; and women under power privatization and the regime of EPIRA.

“We believe that the ERC’s version of performance-based rate methodology is unfair and unjust to consumers. Instead of increasing the efficiency and lowering the tariffs that commonly follow the implementation of performance-based rate in other countries, those of local distribution and transmission utilities have been increasing at an average of 63 percent and 40 percent, respectively, in the Meralco franchise area,” Tanchuling said.

He said aside from its traditional rate and service regulation functions, one of the two primary responsibilities of ERC is to ensure consumer education and protection. – Jose Rodel Clapano