Osmeña: Power rates won't go down

By Teresa Ellera-Dulla

Monday, August 8, 2011

SILAY CITY -- Senator Sergio Osmeña III, chairman of the Senate Committee on Energy, admitted that the cost of power in the country would not go down because 75 percent of the country’s sources of power are dependent on imported fuels.

Last week, Central Negros Electric Cooperative (Ceneco) president Arnel Lapore confirmed that another rate increase will be implemented by electric cooperatives after receiving a notice from the Energy Regulatory Commission (ERC) saying that it granted the petition of the National Power Corporation (NPC) for such increase.

Based on ERC directive to all distribution utilities and the National Grid Corporation of the Philippines (NGCP), the increase is pegged at P0.0709/kilowatt per hour (kwh).

The increase will be reflected on the consumers’ electric bills for August 2011 billing period. The amount will be remitted to the Private Sector Asset and Liabilities Management on or before the 15th day of the succeeding month, until otherwise ordered by ERC.

Osmeña lamented that the instability in the power sector widened during the administration of former President Gloria Macapagal Arroyo who allegedly manipulated the industry causing the delay in the privatization of the independent power producers.

"When we passed the Epira (Electric Power Industry Reform Act) Law in 2001, the price of fuel was only about $20 to $30 per barrel. Now it’s $100 to $120 per barrel and we don’t expect that to go down. But I will say that it would not have gone up as fast if we had not passed this law and allowed the private sector to come in," Osmeña said.

Osmeña assured that the business model developed in the Epira in 2001 is followed.

"It was a very good business model but Gloria, who was manipulating the power sector privatization, delayed the privatization. That’s why there was no competition because there is nobody who would invest $500 million to $1 billion and compete with government because government pricing are artificial,” he explained.

“It was only earlier this year that 70 percent of the IPPs committed to come in and build power plants because they know that even if the government owns 30 percent, it is not enough to manipulate the market. The private sector knows what they are doing. Precisely they will not fool around because they have to take their money back to pay back their loans," he said.

Published in the Sun.Star Bacolod newspaper on August 08, 2011.