Gov't bid to reduce power rates 'piecemeal, selective' - group
05/06/2008 | 12:39 PM
MANILA, Philippines - The Philippine government’s proposal to bring down rates charged by Meralco, the country’s largest electric company, is merely “piecemeal" and “selective," a coalition said.
In a statement, the Freedom from Debt Coalition (FDC) said that while it was supportive of the government’s attempt to reduce power rates, Malacañang should undertake a whole menu of reforms which would translate to lesser energy costs.
Besides calling for the cancellation of contracts with independent power producers—which force consumers to pay for ungenerated electricity—the group also clamored for the removal of the 12 percent value added tax on power.
“Putting socially-sensitive products like oil and power under VAT coverage is unfair and unjust," the group said.
The FDC also sought to put a stop to the operation of the Wholesale Electricity Spot Market (WESM), which allows participants to buy and sell electricity to be delivered a day later. The process supposedly results in cheaper power rates.
“But contrary to its supposed mission of providing cheap supply of electricity, power sourced at WESM was deviously high since it operated in July 2006, from a low of P2/kwh to as high as P12/kwh this month of April 2008," the FDC said. “Because of this PSALM was charged for market manipulation in the WESM, only to be cleared by the ERC for no plausible reason."
Finally, the group also expressed its opposition to the privatization of the National Power Corp. (Napocor) and the National Transmission Corp. (Transco).
“To encourage private sector participation, Napocor rates were raised by at least P1/kwh beginning 2004. And with Transco now in private hands, consumers are likely to face increases in transmission charges when concessionaires begin to recover their investments," the FDC said.
According to the group, inefficiency and corruption in NPC and Transco have also been noted as other factors that cause generation and transmission charges to rise. On the other hand, the absence of strong regulatory governance to check on corporate malpractice and inefficiency in the power industry led to many cases of overcharging that the Supreme Court later disallowed.
In her speech before the Federation of Philippine Industries the other day, President Arroyo called on business leaders to support her in what she considers a “tough battle" against Meralco. Well, just bring it on.
“But will the President wage a tougher battle against the IPPs? Will she change her policy of honoring illegitimate debts? Will she have the courage to deny her office a precious source of revenue by removing VAT on oil and power? Will she carry out not only a revamp of her cabinet but also a reversal of her privatization policies?
We don’t think so. - GMANews.TV
In a statement, the Freedom from Debt Coalition (FDC) said that while it was supportive of the government’s attempt to reduce power rates, Malacañang should undertake a whole menu of reforms which would translate to lesser energy costs.
Besides calling for the cancellation of contracts with independent power producers—which force consumers to pay for ungenerated electricity—the group also clamored for the removal of the 12 percent value added tax on power.
“Putting socially-sensitive products like oil and power under VAT coverage is unfair and unjust," the group said.
The FDC also sought to put a stop to the operation of the Wholesale Electricity Spot Market (WESM), which allows participants to buy and sell electricity to be delivered a day later. The process supposedly results in cheaper power rates.
“But contrary to its supposed mission of providing cheap supply of electricity, power sourced at WESM was deviously high since it operated in July 2006, from a low of P2/kwh to as high as P12/kwh this month of April 2008," the FDC said. “Because of this PSALM was charged for market manipulation in the WESM, only to be cleared by the ERC for no plausible reason."
Finally, the group also expressed its opposition to the privatization of the National Power Corp. (Napocor) and the National Transmission Corp. (Transco).
“To encourage private sector participation, Napocor rates were raised by at least P1/kwh beginning 2004. And with Transco now in private hands, consumers are likely to face increases in transmission charges when concessionaires begin to recover their investments," the FDC said.
According to the group, inefficiency and corruption in NPC and Transco have also been noted as other factors that cause generation and transmission charges to rise. On the other hand, the absence of strong regulatory governance to check on corporate malpractice and inefficiency in the power industry led to many cases of overcharging that the Supreme Court later disallowed.
In her speech before the Federation of Philippine Industries the other day, President Arroyo called on business leaders to support her in what she considers a “tough battle" against Meralco. Well, just bring it on.
“But will the President wage a tougher battle against the IPPs? Will she change her policy of honoring illegitimate debts? Will she have the courage to deny her office a precious source of revenue by removing VAT on oil and power? Will she carry out not only a revamp of her cabinet but also a reversal of her privatization policies?
We don’t think so. - GMANews.TV
