A consumer group said over the weekend that high power rates continue to remain a setback in attracting new investments in the country.
“The foreign investors we are trying to attract will not set up business here due to the prohibited electricity prices those companies are owned by a few oligarch,” Rodolfo B. Javellana Jr., president of United Filipino Consumers and Commuters (UFCC), said while pointing out that the effects of adjusting power rates to reasonable levels would be felt immediately in terms of more investments.
He said this following a 57-centavo per kilowatt hour (kWh) increase in electricity rates of Meralco (Manila Electric Co.) consumers that resulted in an average power rate of P11.9168 per kWh this month.
Power rates in the country, said Javellana, are still among the highest in Asia and are a threat to the economic goals of “Bagong Pilipinas,” the massive reform campaign launched by President Ferdinand R. Marcos Jr.
“The ‘Bagong Pilipinas’ initiatives will not be realized if electricity rates will continue to be expensive and costly,” added Javellana in Filipino.
According to Javellana the high power rates, especially in Meralco service areas accounting for more than 75 percent of the economy, is a major disincentive in efforts to attract more investors, foreign or local.
The UFCC head said that in order to bring a more investor friendly business climate, Congress must dismantle laws allowing monopolies in electric utilities and revise the Electric Power Industry Reform Act (Epira) to lower the cost of electricity in the country.
Javellana said the Epira is “the root of evil” in the power industry and legislators should see it.
“If that is the law, then we should revise or modify, instead of them prioritizing amending the Constitution. We want the economy to improve, we want more ‘foreign direct investments’, then electricity must be made affordable so that there will a lot of investments going in the country,” Javellana added in Filipino. “The key here is the Epira (which must amended or revised).”
Meralco, for its part, explained that this month’s power rates are mostly a result of higher power generation charge of P0.4552, primarily due to higher cost of power from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).
IPPs and PSAs accounted for 32.8 percent and 46.8 percent, respectively, of Meralco’s total energy requirement in the last supply month. It said that pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and FIT-All are all remitted to the government.
Meanwhile, Meralco said it has energized two new smart substations in Taguig City to cater to the growing power demand in the bustling business center.
The P414-million Fort Bonifacio Global City (FBGC)-2 Gas Insulated Switchgear (GIS) Substation was developed to improve the switching flexibility, reliability and power quality in Bonifacio Global City and nearby areas.
Similarly, the P440-million McKinley Hill GIS substation will improve operational switching flexibility during contingencies in McKinley Hill and its adjacent communities.
Both network improvement projects involved the installation of a 115 kV-34.5 kV GIS, and an 83 MVA power transformer.
Among the communities and establishments that will benefit from the new substations are St. Luke’s Medical Center, Shangri-La The Fort, Arthaland, Uptown Mall, One Residences, Venice Grand Canal Mall, Enderun Colleges Inc., Commerce & Industry Plaza, Science Hub, One Le Grand Tower, 8 Upper McKinley Towers, and One World Square.
Meralco Executive Vice President and Chief Operating Officer Ronnie L. Aperocho said the projects form part of Meralco’s commitment to ensure the delivery of reliable and stable electricity service to help promote economic progress.
“As we energize these new substations, we also strengthen our commitment to continue delivering quality electricity service by strategically investing in projects to further improve our distribution system,” Aperocho said. “Our customers can be assured that Meralco will remain a reliable and active partner of the government in the pursuit of continuous economic growth for all.”