Sunday, October 22, 2006 Energy dads mum on true cost of electric power
WHY are electricity rates much higher in Luzon where there are supposedly no oil-fired power plants than in the Visayas that depends partly on oil-fired plants?
And what are the true costs of power in each of the three areas?
Top energy officials have stayed silent or evaded direct answers on the true cost of electric power in Luzon, Visayas and Mindanao when publicly grilled by leaders of the Philippine Chamber of Commerce and Industry (PCCI) during the recent Philippine Business Conference (PBC), the biggest yearly conference of local businessmen.
The grilling was made following presentations made by a representative of the Department of Energy (DOE) Secretary Raphael Lotilla and Philippine National Oil Company (PNOC) chairman Eduardo Mañalac on the state of the energy sector in the Philippines.
Ma?alac and DOE undersecretary Ocampo could not come out with exact figures on how much is the real cost of generating, transmitting and distributing electricity although both are supposed to be knowledgeable on the subject. They reasoned that it is the Energy Regulatory Commission (ERC) that fixes rates after public hearings.
The PCCI panel led by its president Donald Dee asked for the true or correct cost of power because the high rates in the Philippines eat up between 10 and 25 percent of production costs in the manufacturing sector and undermine their ability to compete and win.
Dee and other business leaders have been asking for government action in reducing power rates which have doubled ironically since the energy sector reform law was passed in 2001.
Asked why electric rates in Luzon are higher than in the Visayas by about P1 peso per kilowatt hour, the energy officials had no ready answer. PNOC is supposed to know exactly how much it sells geothermal energy it sells to the power grids in both regions while the DOE is supposed to be on top of the entire sector.
Socioeconomic planning chief Romulo Neri earlier accused regulating agencies in the power, telecommunications and air travel industries of cuddling the big industry players at the expense of the general public.
The energy officials assured though that crippling power black-outs similar to what happened in the last years of the Aquino administration and the first year of the Ramos era are not likely to happen until 2010. There are, the DOE speaker said, enough reserve capacity in all the three regions.
This was called illusory by one of the panelists who pointed out that the so-called reserves are stand-by oil fired generators that further jack up per kilowatt hour rates whenever activated.
In Luzon, for example, the installed capacity of all power plants was pegged at 12,000 megawatts but only 7,500 to 8,000 megawatts are considered dependable or base-load plants. Against peak capacity demand of 6,500, the real reserve is a thin 1,000 megawatts.
If two generators of the Sual coal plant with combined generating power of 1,200 megawatts are shut down for maintenance repair or conk out at the same time, this will wipe out present reserves. (Abe P. Belena/Philexport News and Features/Sunnex)
(October 22, 2006 issue) Write letter to the editor. Click here. Join the Sun.Star message board. Click here.
