World’s most expensive power rates await Luzon consumers

Manila Bulletin
by Samuel Medenilla
August 18, 2014

The country’s largest labor group yesterday warned that consumers in Luzon will soon have to pay the most expensive electricity rates in the world as the government continues to present “band-aid” solutions to address the power crisis expected to hit the country early next year.

In a statement, Trade Union Congress of the Philippines (TUCP) Executive Director Louie Corral lambasted the proposal from the Department of Energy (DOE) to tap rented power barges and generator sets to solve the expected power shortage during the summer season next year.

He said the measure is not a long-term solution since it will significantly hike local power rates.

TUCP estimated the power generation charge for DOE’s contingency plan will hit between P15 to P18 per kilowatt per hour.

“Every household in Luzon will have to pay P1,600 to P1,800 more on top of their regular monthly electric bill once the energy crisis kicks in early next year,” Corral said.

He said this will ultimately have a negative impact on the job security of workers in Luzon as companies struggle to cope with their rising operation costs.

“This scenario is a perfect storm for consumers threatening the job security and already-precarious daily survival of low-wage workers even as it is sending a chilling effect to locators and businessmen,” Corral said.

TUCP urged Energy Secretary Jericho Petilla to come out with a more feasible solution to the power crisis through a extensive tripartite consultations, where they will present the “merits and specifics of the recommended strategies.”

“There is apparently no real plan or strategy towards 2016 and beyond…To calm fears, we are suggesting that Secretary Petilla come up with a timetable for transparent consultations this month,” Corral said.

He said the DOE should also present the tariff simulation for their plans.

TUCP also called on the government to consider the following recommendation from some financial institutions to address local power woes:

• Temporarily enter the power generation business by building more power plants “until such time that each island power grid has at least 20% power reserve;”

• Remove the expanded value added tax; and

• Use the Malampaya fund to subsidize the price of electricity. source