DOE to prioritize power rate reduction

Published January 4, 2021, 7:00 AM by Myrna M. Velasco
https://mb.com.ph/2021/01/04/doe-to-prioritize-power-rate-reduction/

“Power rate reduction” tops the 2021 to-do list of the Department of Energy (DOE) to improve the attractiveness of the Philippines as an investment destination for manufacturers, who have been discouraged by the prohibitive power cost in the country.

Energy Secretary Alfonso G. Cusi told reporters that he formally sent a correspondence to the Department of Trade and Industry (DTI), so the DOE can be apprised of the specific demand of investors when it comes to making power rates affordable and competitive relative to the facet of their operations.

“I have a letter to the DTI. I said: tell me what are the things the prospective manufacturers are looking at in our country – in the energy sector,” the energy chief narrated.

Cusi said he also brought up that “power rate reduction agenda’ with the economic cluster of the Cabinet, so the entire Duterte administration could work together in achieving the target.

“There are a lot of factors why our tariff is higher than the other countries, but we need to find ways to make our tariff competitive, so we can attract the manufacturers to locate in our country,” the energy chief noted.

Cusi acknowledged that the Philippines has been losing out to neighbor-countries because of an array of concerns raised by investors – including labor laws in the country, hurdles in policy implementations, weak infrastructure and logistical support to businesses, as well as expensive electricity rates.

“We have to promote – this pandemic is really a problem, but we have to look at it on opportunities for our country to be competitive, and it’s not only energy…What are our problems? Our high energy tariffs, our labor laws, our policy implementations, our logistics cost. As far as the energy issue is concerned, I’m willing to find ways to make this competitive for manufacturers,” the DOE chief expounded.

Last December 23, he indicated that the energy department called for a meeting with other relevant government agencies so they can harmonize policies and their implementation for the energy sector to flourish – not just in bringing down electricity tariffs especially for businesses, but also in ensuring ample supply and efficient reserves in the power system.

“We invited different agencies under DOE for updating of policies, we just have to make sure that all the policies of the different agencies are aligned,” Cusi stressed.

It is worth noting that intermittent power supply is a major disenchantment to investors because this will not only increase their operating costs, but it could also jeopardize their overall production line.

Cusi opined that stepping up efforts on enticing new manufacturing firm-locators in the country would be paramount, because these are the investors who would be able to provide long-term employment opportunities for the Filipino people, especially the millions displaced in the workplace by the pandemic.

“We just need to find ways, make our country competitive because we need more stable employment for our people,” he pointed out.

And while power prices may not be brought down immediately, one model the energy department is exploring is the grant of preferential tariff to manufacturing firms – similar to a deal carried out with Texas Instruments in Baguio, which is under the supervision of the Philippine Economic Zone Authority.

“Texas Instruments had special arrangement so that it will have its target (electricity) tariff, so we’re looking into it, how we will replicate that,” Cusi said.