Government may tap Malampaya fund to subsidize power rate hike

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Monday, December 9, 2013

PRESIDENT Benigno Aquino III on Monday said that he ordered concerned government officials to study the possibility of tapping the Malampaya fund to lessen the impact of power rate hike, particularly in Metro Manila.

The Chief Executive said he issued the order to Executive Secretary Paquito Ochoa Jr., Energy Secretary Carlos Jericho Petilla, Finance Secretary Cesar Purisima, Budget Secretary Florencio Abad and Presidential Legal Counsel Benjamin Caguioa.

"So baka pumasok ang pagbibigay ng subsidy sa ating mga—, ulitin ko lang ha, baka muna dahil pinagaaral ko pa nga ang subsidy doon sa ating mga public transports, ano, during the period of up to, if I remember correctly, hanggang February, ano, para hindi na kailangang mag-rate increase," he said in an interview following his attendance to the 80th Founding Anniversary of the Department of Labor and Employment in Quezon City.

He said this kind of subsidy was already done when prices of oil were going up two years ago.

Aquino said he expects the concerned Cabinet officials to give him the result of the study and proposal to address the issue before he leaves for Japan this week.

Earlier in the day, Senator Sergio Osmeña III, who chairs the Senate committee on energy and co-chairman of the Joint Congressional Power Commission, said the government could tap the more than P130 billion balance in Malampaya funds to cover the amount of rate increase.

"The Malampaya Fund has gotten very fat. It is time that it is used to ease the burden of power consumers," Osmeña said.

Manila Electric Co. (Meralco) has announced a total increase of P4.15 per kilowatt-hour (kWh) -- inclusive of transmission charge, VAT, local franchise tax and system loss -- in its generation charge this December following the shutdown of the Malampaya natural gas plant from November 11 to December 10. The Malampaya facility fuels three power plants in Luzon, which use the natural gas supplied by the fields in offshore Palawan. It has a combined output of 2,700 megawatts, the bulk of which is under contract with Meralco.

The increase would jack up Meralco's generation charge to over P9/kWh in December from P5.66/kWh in November. With the projected generation charge adjustment, a Meralco customer with a monthly average use of 200 kilowatt-hours currently paying P2,000 per month, will now pay P2,830 per month, or a monthly increase of P830 in his electricity bill.

Meralco will stretch the power rate increase in three months to cover the maintenance cost of power plants, as the Energy Regulatory Commission (ERC) approved on Monday the three-tranche option after a hearing at its office in Ortigas, Pasig City.

The first tranche of the power hike will be implemented on December with P2.41 per kilowatt hour added to the monthly electric consumption while the second tranche will be added on January 2014 with P1.21 kw/h and the last tranche will be on February next year at P0.53 kw/h.

But Bayan secretary general Renato Reyes said the new Meralco power rate hike scheme is still unacceptable.

"It is still premised on automatic recovery without any form of public scrutiny. The new generation rate for December will increase by a hefty P2.41/ kwh," he said.

"Consumers using 200kwh will pay an additional P540 if we include the
VAT (value added tax). The deregulation and privatization of the power sector has truly placed the consumers at the mercy of profit-hungry power firms," Reyes said.

A consumer group also criticized the power firm on the latest increase, describing the move as a "corporate greed in time of disaster."

Ricardo Reyes, Freedom of Debt Coalition (FDC) president, said passing the burden to the consumers shows the disadvantage of privatizing the electric industry under the Electric Power Industry Reform Act (Epira).

"At a time when our country reels in one of the worst disasters in our history, and when Filipinos all over the country and abroad as well as the international community for that matter are engaged in a massive outpouring of solidarity with our devastated compatriots in the Visayas, Meralco is more engrossed in protecting, even increasing its profits- a whopping P 16.2 billion net earnings in 2012 and an average increase of 60.3 percent in annual earnings from 2009 to the present," Reyes said.

He noted that while Meralco's distribution area does not cover the areas directly hit by the disaster many of the victims of super typhoon
Yolanda depend on the support of their relatives in Luzon, other parts of the Visayas and even in Mindanao. (SDR/Camille P. Balagtas/Third Anne Peralta/Sunnex)

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