PCCI claims open access will push up power rates

MANILA, Philippines - Open access, or the freedom of end users to buy their electricity from power plant owners, will push up the already excessive power rates in the country.

This was the conclusion made by the energy committee of the Philippine Chamber of Commerce and Industry (PCCI) recently after its members grilled officials of the Manila Electric Company (Meralco) on what will be the score on the power rate issue when the vaunted reform takes place this coming December.

Implementation of open acess regime will hit everyone in Luzon and the Visayas including locators in special economic zones that presently enjoy cheaper and subsidized power generation rates at P3.90 per kilowatt/ hour. Users outside the special zones presently pay between P5.60 and P5.80 per kilowatt/hour.

The discounted rates enjoyed by foreign companies in the special zones will expire on December 25, 2012 after it was extended for another year.

“It will be hard to match the present rates given to PEZA locators because these are subsidized. We can only offer the true cost of power,” Ernesto Cabral, vice president of Meralco’s M-Power, told the committee chaired by PCCI vice president Jose Alejandrino.

M-Power is Meralco’s newly formed electricity buying and selling unit under the impending open access regime.

Alejandro also pointed out that the vaunted open access regime would not benefit micro, small and medium-sized enterprises anywhere in the country and ordinary households which make up the bulk of electricity users.

“It is only beneficial to the very big companies with at least one megawatt of electricity consumed each month,” Alejandro clarified. “Our SME members are already complaining.”

Meralco had admitted that within its franchise area, only about 700 big companies would have the chance to negotiate their power supplies and rates with power plant owners or their marketing arms. Over 300 of these are in the PEZA zones.

The Trade Union Congress of the Philippines (TUCP), the biggest labor federation in the country that joined the dialogue with Meralco, announced that labor groups - from the moderates to the left - have formed a broad coalition to oppose open access and press government to bring down the highest power rates in Asia suffered by consumers.

TUCP and PCCI recently entered an alliance in the advocacy for the government to bring down power rates which is one of the biggest cause of the country losing its ability to attract investments and exports against neighboring economies.

Luis Corral, speaking for TUCP, also batted for a review of the performance based rates used by the ERC in granting rate increases to power utilities, the role of the ERC and its ability to regulate industry and the over-all direction of the government, if any, in controlling further rate increases. - PHILEXPORT News and Features