Power Discount Benefits 514 Locators

Manila Bulletin
By MYRNA M. VELASCO
January 19, 2012, 1:16am


MANILA, Philippines — The Philippine Economic Zone Authority (PEZA) has presented to the Cabinet economic cluster P1.2 billion in power assistance for this year to a total of 514 export-oriented companies and ensuring their global competitiveness.


PEZA Director-General Lilia B. De Lima said the proposed extension of the Ecozone Rate Program (ERP), which grants discounted power rate to ecozone locators, would go through Malacanang and the Energy Regulatory Commission for approval.


Under the previous power assistance program, which expired on December 25 last year, the PEZA registered firms enjoyed a P1 discount per kilowatt-hour in their power consumption.


This time, however, they are planning for a 25-centavo price difference depending on a “time of use” formula that is being firmed up.


Earlier, Trade and Industry Secretary Gregory L. Domingo said the government has approved in principle the extension of the discounted power rates to economic zone locators until such time that “open access.”


“Yes, approved in principle until such time that Retail Competition and Open Access (RCOA) is implemented but we have to find a legal way to do it,” Domingo said noting that the grandfather rule in this case cannot be applied anymore.


The special rate for ecozones was a pact sealed previously between Meralco and National Power Corp. and assigned to Power Sector Assets and Liabilities Management Corp. (PSALM) following the company’s privatization. The discounted rate will lapse on December 25 this year. It was meant to help businesses wade through high cost of operations, especially for those in the power-intensive sectors.


De Lima has pressed for the extension of the discounted power rate to ecozone locators saying if the ERP will not be extended, it will definitely increase the cost of electricity which will certainly be a huge disappointment to ecozone locators considering the deferment of the RCOA which allows them to choose their preferred suppliers which can offer them competitive power rates. The ERP is benefiting 514 manufacturing ecozone enterprises.


In addition, De Lima said, the national competitiveness of the country is also at stake since the Philippines has the most expensive electricity in Asia.


“High power rates are driving away potential investors because electricity costs account for 40-50 percent of exporters’ total operating expenses,” she said.


Potential investors will have reservations in doing business in the country and those that are already here might relocate to other countries such as Vietnam and China, she added.


Already, because of high power rates in the country, investors have seriously raised this concern putting extreme pressure on the Aquino government to scour for remedial measures.