Epira hit for failing to lower power rates

business mirror

WEDNESDAY, 22 JUNE 2011 19:33 FELIX N. CODILLA III / CORRESPONDENT

JUNE marks the 10th year since the enactment of the Electric Power Industry Reform Act (Epira), and the urgency to amend the law has never been felt more than now as its objective to bring affordable electricity rates remains elusive. This was the main point stressed during the Visayas-wide Power Sector Forum.

Dubbed as “Resisting Power Privatization in the Visayas 10 Years After Epira,” the two-day forum held last week in Ormoc City organized by the Freedom from Debt Coalition, aimed to unify power consumers, policymakers, electric cooperatives and social movements around an antiprivatization platform.

Instead of fulfilling its mandate to lower electricity cost, Epira has only succeeded in privatizing assets and contracts of National Power Corp. (Napocor), said Emmanuel Sano, president of the Association of Visayas Electric Cooperatives (Avec).

“The question is does privatization work for the common good or for only a few investors,” he asked.

One of the onerous provisions in Epira they are lobbying to amend is the privatization policy Sano said.

Since electricity is imbued with public interest, Avec wants government to adopt the internationally accepted practice of awarding a contract to the bidder that offers the least cost of power per kilowatt hour.

“The government used Napocor’s $16-billion debts, which it threatened will balloon to P1.6 billion [P6.88 trillion] to justify the wholesale privatization of its assets. But instead of paying cash upfront, buyers pay by amortization using proceeds from the plants they buy. Simply put, we are being fried in our own fat,” Sano said.

“Amortization doesn’t reduce Napocor’s debts, which government has assumed and is passing to consumers through the universal charge as reflected on their power bill,” he continued. “Worse, the prevailing policy of declaring the highest bidder as winner didn’t lower power rates.”

He cited the privatization of the National Transmission Corp. (Transco), which resulted in higher transmission charges even if the National Grid Corp. of the Philippines, the winning bidder, has not yet introduced much improvement to the system.

“Usually when you’re new in business lugi ka dahil naglalabas ka ng pera. Pero ito hakot agad ng pera,” he said.