Cebu businesses call on gov’t to lower power cost

CEBU, Philippines - The unresolved high cost of energy has again pushed the private sector in Cebu to make another advocacy aimed at pressuring the government to address the problem.

European Chamber of Commerce in the Philippines (ECCP-Cebu) president Ben Dapat said that the expensive energy in the Philippines  has been a battle cry of the business sector for years, “but it seems that government is not addressing it. Nothing had been done about it.”

Dapat who is also the past president of the Cebu Chamber of Commerce and Industry (CCCI) urged other business organizations in Cebu to join the call.

“I think it’s again time for the Cebu private sector to make a renewed and serious advocacy so that the government would address this,” Dapat said.

Guillermo Luz, National Competitiveness Council (NCC) private sector co-chairman,  said that in order for the Philippines to resolve the high cost of energy it has to add more power plants.

The absence of government subsidy is the reason why the Philippines has the highest cost of power  in the ASEAN bloc, he added.

In other countries, Luz said power cost is heavily subsidized by the government. If these subsidies were applied in the Philippines,  energy rate in the country would come out  cheaper than the other ASEAN countries.

As of this time though there is no point for government  to subsidize power as it does not have enough supply. The country still suffer from supply and demand equation, Luz said. 

Thus, the Wholesale Electric Spot Market (WESM) mechanism will not work because the country has no buffer of power supply.  

“We need power, but we don’t want power plants,” Luz said referring to the “usual” opposition of some groups against the establishment of power plants in the country, especially coal-powered plants.

According to Luz, if the Philippines were to hope for inexpensive or competitive power rates, it has to allow power plants to be built.

A report from the National Economic and Development Authority (NEDA-7) indicated that industrial users accounted for the upsurge in power consumption, posting a 20 percent increase in  2011.

The rise in power demand from industrial users indicates an expansion in business activities which speaks well for the robust regional economy.

Total power consumption of residential and commercial users also rose in 2011, although not as much as in the previous year, as the number of consumers mainly from Cebu, increased.

On the average though, per capital power consumption of residential and commercial users went down as demand declined.

The Cebu consumers led in cutting back power consumption although their numbers increased, the report revealed.

Among the four provinces in Central Visayas, Siquijor registered the highest increase in power consumption in 2011 at 14.79 percent. This was followed by Cebu at 8.9 percent and Bohol and Negros Oriental at about four percent each.

In terms of share to the total power consumption of the region, the Province of Cebu accounted for 87 percent of total power used.

The Province of Siquijor on the other hand, registered the highest rate of increase in power consumption, but had the lowest share of total power used during the year. (FREEMAN)