Use Malampaya funds for power subsidy, gov’t urged

MANILA, Philippines - With the impending sharp hike in electricity rates threatening to hurt industries and derail the country’s growth, the government should allow the use of a portion of the Malampaya funds to subsidize power costs, the Philippine Chamber of Commerce and Industry (PCCI) said yesterday.

The PCCI, the country’s largest business group, made the proposal as households and industries brace for a P4.15 per kilowatt-hour increase in electricity rates.

The Manila Electric Co. (Meralco) will collect the adjusted rates in three stages beginning with P2 this month. The earlier P3.44 per kwh figure announced by Meralco covered only generation cost. The P4.15 factored in other components including transmission cost and taxes.

In a press conference yesterday, PCCI vice president for energy Jose Alejandro said tapping the Malampaya funds would provide a quick fix to the current power rate concerns.

Power accounts for about 20 to 30 percent of production costs, he said. “The higher power costs could lead to layoffs,” he said.

While the law limits the use of the Malampaya fund to energy development, a Marcos-era presidential decree allowed the fund to be spent “for such other purposes as may be hereafter directed by the President.”

Meralco said it has to raise its rates due to higher generation cost resulting from the scheduled maintenance shutdown of the Malampaya natural gas plant as well as from the “forced shutdown” of other power plants. The plants have a combined capacity of 2,700 megawatts.

Some quarters have criticized power plant operators for suspending their operations simultaneously, and accused them of colluding with one another to create an artificial shortage of power.

With many businesses complaining of high power cost, Alejandro said it’s now time for the government to come up with a policy aimed at addressing the problem once and for all.

“For the longer term to resolve the recurrence of the power cost surge, the ERC (Energy Regulatory Commission) and the DOE (Department of Energy) should issue a policy that all power supply contracts shall specify that the power supplier shall be responsible or accountable for providing the interim supply during the scheduled maintenance period,” he said.

He said the same should be required for “forced outages.”

Earlier, National Treasurer Rosalia de Leon told a Senate committee that there was still P137 billion left of the Malampaya fund.

Bombshell

For Speaker Feliciano Belmonte Jr., the coming rate hike was a bombshell dropped amid the suffering caused by Super Typhoon Yolanda. 

“The public should have been prepared for this. In the middle of the problems with Yolanda, you suddenly drop this bombshell,” he told a news conference.

His comments were apparently addressed to Meralco which announced the rate hike, as well as to the ERC which approved it.

“It’s a big increase. I think that we are all justified to find out what is the reason behind it,” he said.

He said he supports the inquiry into the rate increase launched by the House energy committee.

Belmonte said Meralco should immediately roll back rates once the “emergency” is over. Meralco, the biggest power distributor servicing Metro Manila and neighboring provinces, had been allowed by the ERC to collect the increase in three phases.

ERC executive director Francis Juan said the amount to be collected this month would not be carried over in January, and the amount to be billed in February would not appear in the March billing. – With Jess Diaz, Paolo Romero, Gerry Lee Gorit, Michelle Zoleta