MANILA, FEBRUARY 23, 2011 (STAR) By Jess Diaz - The Philippines, which ranks among the most corrupt countries, also holds the unenviable record of having the highest residential power rates not only in Asia but in the entire world.
Officials of the Energy Regulatory Commission (ERC) and the Power Sector Assets and Liabilities Management Corp. (PSALM) admitted as much yesterday in the course of a hearing by the House energy committee on the high cost of electricity in the country.
Responding to questions raised by Eastern Samar Rep. Ben Evardone, the energy officials said the Philippines has overtaken Japan as the country that charges the highest electricity rate on residential users.
As for commercial users, the country charges the second highest rate after Singapore. Commercial users pay more here for electricity than those in Japan.
Former Pampanga Rep. Zenaida Ducut, whom former President Gloria Macapagal-Arroyo had appointed ERC chair months before ending her nine-year presidency, and Lourdes Alzona, PSALM vice-president for finance, could not give the energy committee comparative data on the rates in Japan, Singapore, the Philippines, and other countries.
But Evardone revealed the rates to reporters based on a Department of Energy report made available to him by Batasan Rep. Henedina Abad, chair of the energy committee.
Evardone, whose Resolution 106 prompted the committee inquiry, said the residential rate here is about 18 US cents per kilowatt-hour.
It is 17 cents in Japan, 15 in Singapore, eight in Thailand, seven in Malaysia, five in Indonesia, and three cents in Vietnam, he said.
In terms of the commercial rate, it is 14 cents in Singapore, 13 in the Philippines, 12 in Japan, eight in Thailand, seven in Malaysia, six in Vietnam, and five cents in Indonesia.
"No wonder we have not been attracting foreign investors. Imagine, we beat the developed countries and largest economies like Japan in terms of power rates?" Evardone said, adding electricity rates are a big part of the cost of doing business.
The energy officials tried to justify the high cost of electricity here by saying the other countries cited are subsidizing their residential users.
"But we also have subsidies here, like the lifeline rates for poor households," Deputy Speaker Arnulfo Fuentebella, one of the authors of the Electric Power Industry Reform Act (Epira) of 2001, retorted.
"Our principal objective in enacting Epira 10 years ago was to bring down electricity rates. Sad to say, that did not happen. The law did not fail; it is the implementation that failed. This is not what we expected to happen," he said.
Fuentebella hinted that the ERC and Congress should share part of the blame for the high cost of electricity here.
"The ERC has disregarded some mandatory rate reduction schemes in violation of Epira," he said.
On the part of Congress, he said the legislature imposed a 12-percent value added tax on electricity, which used to be VAT-exempt.
Alzona admitted that despite the already high cost of power here, PSALM would push through with asking the ERC to approve an adjustment of up to 15 centavos per kilowatt-hour to enable it to pay its loans.
Rep. Juan Miguel Arroyo of the party-list group Ang Galing Pinoy urged PSALM and the National Power Corp. (Napocor) to collect billions from private power distributors and cooperatives before making the public pay more.
"They should collect from Meralco and electric cooperatives," he said. Arroyo was energy committee chairman in the previous Congress.
Energy officials admitted that Meralco owes Napocor about P36 billion incurred between 2001 and 2003.
They said Meralco, the largest power distributor in the country, is disputing the billings and the case is now pending in court.
They said among distribution utilities in the provinces, the Lanao del Sur Electric Cooperative has the biggest debt owed to Napocor, which amounts to P4.6 billion.
Rep. Maximo Rodriguez of the party-list group Abante Mindanao shared Arroyo's call for PSALM and Napocor to compel private distribution firms to pay their debts before petitioning for a rate increase.
"Meralco can afford to pay. It is making billions every year in net profits," he said.