Lowering electricity rates

EDITORIAL

Compounding the almost daily brownouts, electricity rates are going higher and according to proponents of the Electric Power Industry Reform Act, the Philippines will continue to lag behind its Southeast Asian neighbors in terms of foreign direct investments unless the EPIRA is fully implemented,

The EPIRA was conceptualized to attract bigger players in the power industry, promote competition and eventually bring down electricity rates.

Their position: If there were more suppliers, the chances of power rates and the cost of doing business going down would increase, Based on 2007 data from the ASEAN Power Utilities Authorities, a consultative group attached to the Association of Southeast Asian Nations (ASEAN), the average cost of electricity in the Philippines was 17.5 US cents per kilowatt-hour (kWh).

It was more than three times the cost in Vietnam (5.38 per kWh) and much higher than Indonesia (7.77 per kWh), Malaysia (7.67 kWh) and Thailand (8.50 per kWh).

Last year, the Philippines had the second-highest electricity rates in Southeast Asia, trailing only Cambodia. Data compiled by the Department of Energy also revealed that as of December 2008, the Philippines has the sixth highest industrial power rates in the world and seventh highest residential rates.

It comes as no surprise then that FDIs in other neighboring countries were also higher. according to Sen. Chiz Escudero who said Bangkok Sentral ng Pilipinas records indicated that total FDIs in 2008 totaled $1.5 billion, a 48 percent decline from $2.98 billion in 2007.

In comparison, Thailand recorded $9.8 billion, Indonesia $7.9 billion and Vietnam $8.05 in FDIs. But then, if the EPIRA is fully implemented, would it would go the way of the fuel industry wherein following government deregulation, a “cartel” was allegedly formed among the top players wherein oil prices were “deregulated at higher prices?