Wednesday, November 21, 2007 Editorials: High electricity rates
IF IT is true that our electricity is the most expensive in the whole of Asia, and that the power rates our households consume now is double those in 2001, then something was decidedly wrong with the anticipatory policies of our decision-makers.
The contemporary power situation appears short of earlier expectations.
Thus, middle level and low income consumers are in a bind right now.
Without any alternative source of power, and held “captive” by the rising price of kerosene--the traditional source of energy of rural folks-- marginal consumers have no choice but suffer the ill-effects of the “politics” of electricity.
Epira
In 2001, Congress passed a law that Malacañang believed would lower the power rates and benefit industrial and household consumers.
On top of easing the burden of the “government of some P38 billion in annual subsidies to the power sector,” the Electric Power Industry Reform Act (Epira), so President Arroyo pointed out, would have caused the deprivation of implementing funds for other government programs.
Six years later, the law had failed to achieve its objective.
It has “joined a long line of laws that have fallen short of their objectives because of a combination of flawed provisions and implementation.”
Flawed provisions
In the case of Epira, these include “continued tolerance of old contracts whose onerous provisions have only contributed to ever-rising debts of NPC, monopolistic practices,” etc.
The phrase “flawed provisions” is another way of saying power interest lobbyists in Congress succeeded in efforts to defang the law.
The Independent Power Producers (IPP) enjoyed huge profits from their “overpriced excess capacity contracts” with government.
The Fidel Ramos administration entered into a power contract with the IPPs “during the energy crisis in the 1990s.”
Obligation
And so, government’s “contractual obligations to them (IPP) became the single biggest reason for the fatal financial bleeding of the NPC, posing additional burden to the government’s fiscal position.”
Government paid the IPP P536 billion last year.
Need we ask, then, why the Philippines continues to have higher electricity rates?
