POWER  RATES  SURE  TO  GO  UP

MANILA, OCTOBER 12, 2006
(STAR) By Jess Diaz - Bad news for consumers: electricity rates, which have doubled since the imposition of the expanded value-added tax and several rate adjustments, will increase further in the next few months.

The specter of higher power rates was raised as an oil consumer watchdog warned of rotating blackouts nationwide from Nov. 18 to Dec. 17, even as Malacañang gave assurances that "no one will be groping in the dark in the coming years.’’

Albay Rep. Joey Salceda, an economic adviser of President Arroyo, told a news conference there was no way for power rates to go but up because "price manipulation" in the so-called wholesale spot electricity market (WESM) increased prices by two-thirds.

"The three players — Napocor (National Power Corp.), PSALM (Power Sector Assets and Liabilities Management Corp.) and Meralco — are to blame for this. Napocor in particular, which controls the power generation sector, has a lot of explaining to do," he said.

He said three weeks ago, WESM prices inexplicably shot up from P2.88-per-kilowatt-hour to P6.88 per kwh.

"The only explanation is price manipulation, given the fact that demand and supply were constant. Hindi pa tayo tinatamaan ng Milenyo noon (We had not yet been hit by typhoon Milenyo at the time)," he said.

He added that the high cost would soon be reflected in consumers’ monthly electricity bills.

WESM is embodied in the Electric Power Industry Reform Act of 2001 (Epira).

It works like the Philippine Stock Exchange (PSE), where sellers and buyers make price offers for shares of stock of listed companies. However, unlike in PSE, according to Salceda, there are only three sellers in WESM and there are also a few buyers.

The sellers are Napocor and PSALM. Meralco is the third seller because it is affiliated with independent power producers. The buyers are big consumers and power distributors, including Meralco.

The Joint Congressional Power Commission (JCPC) is scheduled to inquire today into the alleged recent price manipulation in WESM that brought up the cost of power immensely.

Lanao del Sur Rep. Alipio Badelles, who heads the House energy committee and chairs JCPC jointly with his Senate counterpart, Sen. Miriam Defensor Santiago, said the objective of WESM is to bring down the cost of electricity through competition and make pricing transparent.

"But as of now, we cannot have real competition since the government, through Napocor and PSALM, remains in control of power generation," he said.

He lamented that PSALM has failed to accomplish its mandate in Epira to sell Napocor’s plants and other facilities.

"PSALM should have already privatized at least 70 percent of generation assets by now," he said.

JCPC would impose "sanctions" on those found behind the reported recent price manipulation, Badelles said.

Both Salceda and Badelles stressed the need for PSALM to speed up the sale of Napocor assets to qualified buyers to promote better competition in the industry and to bring in much-needed revenues for the government.

The largest Napocor asset sale — that of the P30-billion, 600-megawatt plant in Masinloc, Zambales — became a flop after the winning bidder, YNN Pacific Consortium, failed to deliver the down payment of more than $200 million. PSALM is now again looking for interested bidders for the Masinloc plant.

Warning downplayed

Malacañang on Tuesday downplayed warnings by Consumer and Oil Price Watch (COPW) that the temporary shutdown of some plants as part of the scheduled maintenance of the Malampaya Natural Gas Pipeline would trigger a nationwide power crisis and result in rotating blackouts from November to December.

"The periodic assessment of our future energy requirements is a permanent task of the government and our energy team is closely working with all industry sectors and stakeholders in this regard,’’ Presidential Spokesman Ignacio Bunye said. He said authorities were working round-the-clock to stave off a power crisis.

"The periodic assessment of our future energy requirements is a permanent task of the government and our energy team is closely working with all industry sectors and stakeholders in this regard,’’ Bunye said.

"We have enough energy supply and we assure the public that this will be maintained in the coming years,’’ he added.

COPW chairman Raul Concepcion said the scheduled maintenance of the Malampaya Natural Gas Pipeline would require the shutdown of 2,700-megawatt gas-fired plants in Batangas.

This means, National Power Corp. (Napocor) will have to recommission the more expensive Malaya oil fired power plant. This development is expected to push prices at WESM.

Bunye said the ongoing privatization of Napocor as well as new investments in the power sector should erase fears of a power crisis.

"We are also exploring various alternative sources of energy to reinforce the whole system and we assure the public that no one will be groping in the dark in the coming years,’’ Bunye said.

COPW said the 600-MW Mirant Sual coal-fired plant in Pangasinan broke down on Aug. 11 and would take six to eight months to put back into service.

He said the additional 4,438 MW demand in the next five years will require the setting up of new power plants.

"Based on the Philippine Energy Plan 2005, the system peak demand is expected to increase from 9,827 MW in 2005 to 14,265 MW in 2010 and it will take five years to build a new power plant,’’ COPW said.

COPW also said government’s privatization program would only "transfer the ownership of the assets to the private sector but does not add to the generating capacity" of the plants.

"To date, only 65 MW wind power plant is under construction. This is far from the goal of 4,438 in 2010,’’ COPW said.

The oil consumer watchdog also asked legislators to make necessary amendments to EPIRA before the congressional recess on Dec. 15 to prevent a power crisis.

COPW said the amendments should include privatizing the National Transmission Corp. with the winning bidder to be given a 25-year congressional franchise to operate; transferring the management and control of Napocor-Independent Power Producer plants to IPP administrators; and making the Energy Regulatory Commission "truly independent,’’ with its decisions not to be subjected to court reviews.

It also proposed a moratorium on the digging of new deep wells by industries, subdivisions and golf courses to keep water reserves from getting depleted.


Chief News Editor: Sol Jose Vanzi

© Copyright, 2006  by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved


PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE