NEWS: "Philippines has world's highest power rates"

**ghosthunter** · February 23rd, 2011 03:25 PM

http://www.philstar.com/Article.aspx...bCategoryId=63

[SIZE="4"]Phl has world's highest power rates[/SIZE]

By Jess Diaz (The Philippine Star) Updated February 23, 2011 12:00 AM

MANILA, Philippines - The Philippines, which ranks among the most corrupt countries, also holds the unenviable record of having the highest residential power rates not only in Asia but in the entire world.

Officials of the Energy Regulatory Commission (ERC) and the Power Sector Assets and Liabilities Management Corp. (PSALM) admitted as much yesterday in the course of a hearing by the House energy committee on the high cost of electricity in the country.

Responding to questions raised by Eastern Samar Rep. Ben Evardone, the energy officials said the Philippines has overtaken Japan as the country that charges the highest electricity rate on residential users.

As for commercial users, the country charges the second highest rate after Singapore. Commercial users pay more here for electricity than those in Japan.

Former Pampanga Rep. Zenaida Ducut, whom former President Gloria Macapagal-Arroyo had appointed ERC chair months before ending her nine-year presidency, and Lourdes Alzona, PSALM vice-president for finance, could not give the energy committee comparative data on the rates in Japan, Singapore, the Philippines, and other countries.

But Evardone revealed the rates to reporters based on a Department of Energy report made available to him by Batasan Rep. Henedina Abad, chair of the energy committee.

Evardone, whose Resolution 106 prompted the committee inquiry, said the residential rate here is about 18 US cents per kilowatt-hour.

It is 17 cents in Japan, 15 in Singapore, eight in Thailand, seven in Malaysia, five in Indonesia, and three cents in Vietnam, he said.

In terms of the commercial rate, it is 14 cents in Singapore, 13 in the Philippines, 12 in Japan, eight in Thailand, seven in Malaysia, six in Vietnam, and five cents in Indonesia.

“No wonder we have not been attracting foreign investors. Imagine, we beat the developed countries and largest economies like Japan in terms of power rates?” Evardone said, adding electricity rates are a big part of the cost of doing business.

The energy officials tried to justify the high cost of electricity here by saying the other countries cited are subsidizing their residential users.

“But we also have subsidies here, like the lifeline rates for poor households,” Deputy Speaker Arnulfo Fuentebella, one of the authors of the Electric Power Industry Reform Act (Epira) of 2001, retorted.

“Our principal objective in enacting Epira 10 years ago was to bring down electricity rates. Sad to say, that did not happen. The law did not fail; it is the implementation that failed. This is not what we expected to happen,” he said.

Fuentebella hinted that the ERC and Congress should share part of the blame for the high cost of electricity here.

“The ERC has disregarded some mandatory rate reduction schemes in violation of Epira,” he said.

On the part of Congress, he said the legislature imposed a 12-percent value added tax on electricity, which used to be VAT-exempt.

Alzona admitted that despite the already high cost of power here, PSALM would push through with asking the ERC to approve an adjustment of up to 15 centavos per kilowatt-hour to enable it to pay its loans.

Rep. Juan Miguel Arroyo of the party-list group Ang Galing Pinoy urged PSALM and the National Power Corp. (Napocor) to collect billions from private power distributors and cooperatives before making the public pay more.

“They should collect from Meralco and electric cooperatives,” he said. Arroyo was energy committee chairman in the previous Congress.

Energy officials admitted that Meralco owes Napocor about P36 billion incurred between 2001 and 2003.

They said Meralco, the largest power distributor in the country, is disputing the billings and the case is now pending in court.

They said among distribution utilities in the provinces, the Lanao del Sur Electric Cooperative has the biggest debt owed to Napocor, which amounts to P4.6 billion.

Rep. Maximo Rodriguez of the party-list group Abante Mindanao shared Arroyo’s call for PSALM and Napocor to compel private distribution firms to pay their debts before petitioning for a rate increase.

“Meralco can afford to pay. It is making billions every year in net profits,” he said.

http://www.philstar.com/Article.aspx...bCategoryId=63

**ghosthunter** · February 23rd, 2011 03:31 PM

http://www.philstar.com/Article.aspx?articleId=660049

EDITORIAL - Looming crisis

Here is one of the biggest disincentives to foreign direct investment: the Philippines has the second highest commercial power rates in the region, after Singapore. This was revealed at a hearing yesterday of the House of Representatives’ energy committee, where a congressman disclosed that the Philippines also has the highest residential power rates in the world.

The House panel learned that commercial power rates are 14 centavos per kilowatt-hour in Singapore, 13 cents per kwh in the Philippines, 12 cents in Japan, eight cents in Thailand, seven in Malaysia, six in Vietnam, and five cents in Indonesia.

For residential users, the rates are 18 cents per kwh in the Philippines, 17 cents in Japan, 15 in Singapore, eight in Thailand, seven in Malaysia, five in Indonesia, and three cents in Vietnam.

The figures were reported to the House committee by officials of the Energy Regulatory Commission and the Power Sector Assets and Liabilities Management Corp. PSALM is reportedly planning to ask the ERC for another increase of 15 centavos per kwh in power rates to repay its debts.

Ten years after the enactment of the Electric Power Industry Reform Act, the industry is still badly in need of an overhaul. Experts have warned that the country could face another energy crisis this year the likes of which the nation suffered during the final months of the presidency of Corazon Aquino. Worse, power rates have grown exponentially since those months of eight-hour daily blackouts. In residential areas, soaring electricity costs have made comfortable ventilation a luxury for millions of Filipinos.

Inadequate, unreliable and expensive power supply has often been cited as one of the biggest disincentives to investment in this country. High power costs are driving even some Filipinos to bring their business elsewhere in the region. If the government wants to lure more job-generating investments, and before the country again reels from crippling daily blackouts, this problem must be confronted with urgency.

http://www.philstar.com/Article.aspx?articleId=660049

**ghosthunter** · February 23rd, 2011 03:38 PM

An editorial back in DEC 2010

http://www.philstar.com/Article.aspx?articleid=638520

EDITORIAL - A looming crisis

(The Philippine Star) Updated December 12, 2010 12:00 AM

In the past months, experts have warned that a power crisis looms next year, with Mindanao to be hit hard together with Luzon, including Metro Manila. The latest warning came from an official of the National Grid Corp. of the Philippines, who said that with unstable supply and no new generating capacity expected soon, the country faces a bleak energy situation in 2011.

Last summer, parts of Minda-nao, where hydropower accounts for 74 percent of energy supply, already suffered from daily blackouts that sometimes lasted up to 12 hours.

It takes from three to seven years to build a new power plant. The country can again tap electricity from barges, but operators of such barges want an assurance of sufficient demand that the government cannot guarantee in Mindanao. Even where there is high demand, such as in Metro Manila, electricity generated by barges is expensive. This is a lesson the nation learned when the Ramos administration had to turn to power barges to restore the lights in Luzon ASAP after Metro Manila was crippled by eight-hour daily blackouts in the final months of the first Aquino administration.

Even after that first serious energy crisis, the country failed to implement measures to increase generating capacity to meet rising demand. Initiatives in new energy projects or plans to expand operations became bogged down in scandals and politics.

The result has been felt for many years now: the Philippines has inadequate energy supply and one of the highest power costs in Asia. This situation has been one of the biggest disincentives to foreign investment, but little was done in the past decade to address the problem. It is now up to the second Aquino administration to deal with the neglect, and prevent a return of the Age of Darkness.

http://www.philstar.com/Article.aspx?articleid=638520

**digitalron** · February 23rd, 2011 05:36 PM

“They should collect from Meralco and electric cooperatives,” he said. Arroyo was energy committee chairman in the previous Congress.

Energy officials admitted that Meralco owes Napocor about P36 billion incurred between 2001 and 2003.

They said Meralco, the largest power distributor in the country, is disputing the billings and the case is now pending in court.

Meralco puts out TV ads left and right, maintains a pro basketball team... and can't settle its obligations to the government. Something is definitely wrong here.

I find great significance in this because at the moment, one of the Philippines' strongest suit is in the services sector, particularly BPO and back office services, both of which rely heavily on technology and as a result, electricity. We want to catch up to India and be the leading (and choice) BPO services provider in the world. To do that, we need to incentivize those who would like to put up the infrastructure and invest in building these service hubs. With the high cost of electricity, businesses end up ponying more for operating costs... making us very unattractive location for business locators.

I hope the President focuses on these issues rather than gallivanting around with his cars and ladies.... note that I do not view those as bad in themselves, but the Prez should stop being distracted and focus on the really important things like strengthening the underlying structures of our economy.

I have yet to hear of any concrete economic plans. At least Ramos, for all his faults, had his Philippines 2000 which helped focus efforts and lifted us from the mire of electricity(less) limbo.

**duron** · February 23rd, 2011 05:42 PM

that's why Microwave & those Turbo Cookers are a no-no in the Phil. sigh

i guess the only way to bring down the price is to have competition but that too would be very hard as the gov. is one of the shareholder/ profit earning body from the monopoly.

it's time for Solar Power!

**hondaboot** · February 23rd, 2011 06:50 PM

we have higher power rates bec. we are populists country. we pay for the generated power lost to squatters and the marginalized.

imagine mo kuryente pag generate, it's not some water na you can save on the back end pag hindi nagamit. pag na-generate kelangan gamitin, and why are our generation requirement so high eh kasi nga kelangan natin i-subsidize ang mga squatter na walang ginawa kung di puro magreklamo at mainggit at worst, gawan tayo ng krimen.

that is the sad truth about our country. it's not corruption that is the problem, it's our double standard policy: the true policy which is followed by all countries and another populist policy for the poor

it's like the rotten apple in basket scenario lang talaga. that's who we are, and we are cursed to be like this forever.

**tidus1203** · February 23rd, 2011 07:00 PM

You know what OB, sometimes you do make sense... Sana ganun ka lagi!

**shakatak70** · February 23rd, 2011 07:39 PM

Originally Posted by hondaboot

we have higher power rates bec. we are populists country. we pay for the generated power lost to squatters and the marginalized.

imagine mo kuryente pag generate, it's not some water na you can save on the back end pag hindi nagamit. pag na-generate kelangan gamitin, and why are our generation requirement so high eh kasi nga kelangan natin i-subsidize ang mga squatter na walang ginawa kung di puro magreklamo at mainggit at worst, gawan tayo ng krimen.

that is the sad truth about our country. it's not corruption that is the problem, it's our double standard policy: the true policy which is followed by all countries and another populist policy for the poor

it's like the rotten apple in basket scenario lang talaga. that's who we are, and we are cursed to be like this forever.

It short we are paying for the power generation loss na nawawala due to illegal tapping. At saan kalimitang nangyayari and nakawan ng kuryente?!?

**chua_riwap** · February 23rd, 2011 07:51 PM

Originally Posted by hondaboot

we have higher power rates bec. we are populists country. we pay for the generated power lost to squatters and the marginalized.

imagine mo kuryente pag generate, it's not some water na you can save on the back end pag hindi nagamit. pag na-generate kelangan gamitin, and why are our generation requirement so high eh kasi nga kelangan natin i-subsidize ang mga squatter na walang ginawa kung di puro magreklamo at mainggit at worst, gawan tayo ng krimen.

that is the sad truth about our country. it's not corruption that is the problem, it's our double standard policy: the true policy which is followed by all countries and another populist policy for the poor

it's like the rotten apple in basket scenario lang talaga. that, t's who we are, and we are cursed to be like this forever.

OT.....OB mukhang ok ka na ah. Di ka na "depressed"?

BTT.