Date:
June 2003
The Energy Crisis Reaffirmed
Much
of Makati was without power for most of the
working day on Monday June 2. As the Makati
Central Business District suffered its first
brownout for the season, the Department of
Energy was again warning of dwindling supply
reserves.
In a statement to the press, Energy Secretary,
Vincent Perez Jr. claimed that the expanding
economy had caused a dramatic increase in
electricity consumption during the first quarter.
Unless additional power plants were put in
place quickly the country would again suffer
a power crisis. The current DOE forecast is
for an annual growth in electricity demand
of around 7.9%. Yet the National Power Corporation
(Napocor) as reported that its sales jumped
by 8.3% (compared to the same period for 2002)
in the first quarter. In the Visayas grid
sakes went up by 14% as compared to last year.
According to Perez an additional 1,615 megawatts
of generating capacity is need in Luzon, 240
megawatts in the Visayas and 256 megawatts
in Mindanao by 2006 at the latest.
In particular, Panay Island in the Western
Visayas was singled out as one of the most
vulnerable areas. According to Perez the effects
of energy shortages could be expected to be
felt starting December 2003 and just ahead
of the May 2004 elections.
It was therefore disturbing that one Visayas
based IPP announced closure of its operations
last week because of its lack of profitability.
Meanwhile, while Meralco ponders how it is
going to reimburse consumers for its previous
overcharging practices, it has been given
a fresh windfall by the Energy Regulatory
Commission (ERC). Last week the ERC approved
a rate hike for the major distribution utility,
which will target moistly industrial users.
Small consumers - those who use up to 300-kilowatt
hours per month will enjoy a 70% cut in their
distribution rates currently priced at P0.76
per kilowatt-hour. On the other hand those
who consume more than 300 KwH per month will
face a rate hike of P0.0876 per KwH bringing
the base rate to P0.8476/KwH.
The ERC has also approved a new rate calculation
method for the transmission sector of the
power distribution industry that is performance-based.
The traditional return-on-rate basis (RORB)
previously used for setting distribution charges
has been replaced by the new formula to encourage
investment in the recently privatized power
transmission industry. The new formula allows
a maximum annual revenue cap pegged to changes
in the consumer price index but with adjustments
to encourage productivity and efficiency.
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