Ecozone stakeholders push extension of power rate discounts

Manila Times.net
Published : Monday, October 24, 2011 00:00 Written by : EUAN PAULO C. AÑONUEVO


ECONOMIC zone stakeholders have asked the government to extend their power rate discounts.


In separate letters to state-owned National Power Corp., Manila Electric Co., Philippine Economic Zone Authority (PEZA) and the Semiconductors and Electronics Industries of the Philippines Inc. asked for the extension of the Ecozone Rate Program, the memorandum of agreement for which will lapse once open access and retail competition commence in the power sector in December.


Signed in 2007, the ERP grants discounts on the electricity rates of accredited industries in ecozones under PEZA.


The program benefited 279 customers in industrial areas, representing 43 percent of total manufacturing exports valued at about $19 billion. These industries provide more than 222,213 jobs.


“Considering the benefits of the ERP to the economy and the country as a whole, there is a greater reason and necessity to extend the term of our MOA to ensure an affordable supply of power to vital industries and thus enhance their competitiveness in the global market,” Oscar Reyes, Meralco senior executive vice president and chief operating officer, said.


The Electric Power Industry Reform Act of 2001 mandates the establishment of an open access regime in the power sector wherein generators shall be allowed to market their output directly to qualified consumers. This aims to spur competition and efficiency in the power generation sector, which was once dominated by the government.


Once open access kicks in, however, Napocor’s supply contracts with utilities like Meralco would automatically lapse.


The Energy Regulatory Commission earlier set December 26 as the start of open access.


Lilia de Lima, PEZA director general, said the extension of the ERP would help secure locators’ power supply amid a projected shortfall in Luzon in the coming years.


“This will also enable ecozone export producers to focus on their business and even expand their production operations as they need not be bothered by the projected supply shortage in the Luzon grid and other uncertainties with the forthcoming implementation of retail competition and open access,” she said.


For his part, Ernie Santiago, Seipi president, said the continuation of the power rate discount would be a welcome “breathing space” for manufacturers who are still reeling from the global financial crisis and the disasters in Japan.