World's highest power rates

PHILIPPINES HAS WORLD'S HIGHEST POWER RATES

MANILA, FEBRUARY 23, 2011 (STAR) By Jess Diaz - The Philippines, which ranks among the most corrupt countries, also holds the unenviable record of having the highest residential power rates not only in Asia but in the entire world.

Officials of the Energy Regulatory Commission (ERC) and the Power Sector Assets and Liabilities Management Corp. (PSALM) admitted as much yesterday in the course of a hearing by the House energy committee on the high cost of electricity in the country.

Responding to questions raised by Eastern Samar Rep. Ben Evardone, the energy officials said the Philippines has overtaken Japan as the country that charges the highest electricity rate on residential users.

As for commercial users, the country charges the second highest rate after Singapore. Commercial users pay more here for electricity than those in Japan.

Former Pampanga Rep. Zenaida Ducut, whom former President Gloria Macapagal-Arroyo had appointed ERC chair months before ending her nine-year presidency, and Lourdes Alzona, PSALM vice-president for finance, could not give the energy committee comparative data on the rates in Japan, Singapore, the Philippines, and other countries.

But Evardone revealed the rates to reporters based on a Department of Energy report made available to him by Batasan Rep. Henedina Abad, chair of the energy committee.

Evardone, whose Resolution 106 prompted the committee inquiry, said the residential rate here is about 18 US cents per kilowatt-hour.

It is 17 cents in Japan, 15 in Singapore, eight in Thailand, seven in Malaysia, five in Indonesia, and three cents in Vietnam, he said.

In terms of the commercial rate, it is 14 cents in Singapore, 13 in the Philippines, 12 in Japan, eight in Thailand, seven in Malaysia, six in Vietnam, and five cents in Indonesia.

“No wonder we have not been attracting foreign investors. Imagine, we beat the developed countries and largest economies like Japan in terms of power rates?” Evardone said, adding electricity rates are a big part of the cost of doing business.

The energy officials tried to justify the high cost of electricity here by saying the other countries cited are subsidizing their residential users.

“But we also have subsidies here, like the lifeline rates for poor households,” Deputy Speaker Arnulfo Fuentebella, one of the authors of the Electric Power Industry Reform Act (Epira) of 2001, retorted.

“Our principal objective in enacting Epira 10 years ago was to bring down electricity rates. Sad to say, that did not happen. The law did not fail; it is the implementation that failed. This is not what we expected to happen,” he said.

Fuentebella hinted that the ERC and Congress should share part of the blame for the high cost of electricity here.

“The ERC has disregarded some mandatory rate reduction schemes in violation of Epira,” he said.

On the part of Congress, he said the legislature imposed a 12-percent value added tax on electricity, which used to be VAT-exempt.

Alzona admitted that despite the already high cost of power here, PSALM would push through with asking the ERC to approve an adjustment of up to 15 centavos per kilowatt-hour to enable it to pay its loans.

Rep. Juan Miguel Arroyo of the party-list group Ang Galing Pinoy urged PSALM and the National Power Corp. (Napocor) to collect billions from private power distributors and cooperatives before making the public pay more.

“They should collect from Meralco and electric cooperatives,” he said. Arroyo was energy committee chairman in the previous Congress.

Energy officials admitted that Meralco owes Napocor about P36 billion incurred between 2001 and 2003.

They said Meralco, the largest power distributor in the country, is disputing the billings and the case is now pending in court.

They said among distribution utilities in the provinces, the Lanao del Sur Electric Cooperative has the biggest debt owed to Napocor, which amounts to P4.6 billion.

Rep. Maximo Rodriguez of the party-list group Abante Mindanao shared Arroyo’s call for PSALM and Napocor to compel private distribution firms to pay their debts before petitioning for a rate increase.

“Meralco can afford to pay. It is making billions every year in net profits,” he said.

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REACTION

From the moment I read the title of the article and the first sentence of the article, I was the happiest citizen in the Philippines. I thought Philippines hold titles that are unpleasing in the eyes and ears of the people. I was wrong. Imagine, despite of the title "one of the most corrupt countries", Philippines was great for having the title "country who has the world's highest power rates".

As a simple citizen, my heart fell pleasure for a while knowing that the one holding that title was the country where I belong. It makes me proud also because I feel like I was a part of it. Even though I don't know much about electricities, I can sense that this issue is strong and extraordinary. This issue was silent but meaningful. 

I am super proud to know that Philippines has overtaken Japan as the country that charges the highest electricity rate on residential users. And as for commercial users, our country charges the second highest rate after Singapore. Commercial users pay more here for electricity than those in Japan. Cool!

With this issue, I am very sure that foreign investors would definitely be attracted. I hope this would be a good start for the country to be the best. This should be the start of the productive economic stabilities of the country.

Higher taxi rates

 Higher taxi fares start today, says DoTC

TAXICABS WHOSE license plates end in "1" and "6" may start charging higher fares starting today once their meters have been calibrated to comply with a directive to issue receipts, the Department of Transportation and Communications (DoTC) said yesterday.

Meters of the first 300 units whose license plates end with the two numbers will be initially calibrated based on the schedule set by the Land Transportation Franchising and Regulatory Board (LTFRB). The fare increase was approved early this month.

"The LTFRB will calibrate 300 taxi units everyday. There are 22,000 taxi units in Metro Manila," Transportation Undersecretary Dante M. Velasco told BusinessWorld in a telephone interview.

"Taxi units with license plates ending with 1 and 6 will be calibrated first, then 2 and 7 will have their meters calibrated followed by those ending in 3 and 8, 4 and 9 then 5 and 0," he added.

"We don’t have a definite schedule when we will finish each set of the license plates," he further said.

Mr. Velasco clarified that taxi operators whose meters are not calibrated cannot implement the new fares.

"Passengers should check if the taxi unit had calibrated its meter with a sealed sticker. They should ask for a receipt," he said.

Mr. Velasco noted that fares will be maintained in some areas due to cost of business operation and cost of living on the part of commuters.

"The rate of fare increase in areas outside Metro Manila could not be the same as what we had approved," he said.

"The cost of living of passengers and the cost of operations of taxi operators in all areas are not the same," he added.

"Baguio City and other areas outside Metro Manila are exempted... because the taxi operators from the area have a pending petition before our office to have a lesser increase than P10. LTFRB has still to decide on their petition," Mr. Velasco further said.

LTFRB said in previous reports that it had acted on a Jan. 22, 2010 fare increase petition filed by the Philippine National Taxi Operators Association.

Regulators noted that taxi fares had last been adjusted on Sept. 3, 2004 and that prices of fuel, spare parts, labor and cost of living had since increased.

Taxi operators have to pay a P510 filing fee for an application to increase fares and another P500 for meter recalibration/resealing.

Noncompliant drivers and operators will be subject to a P2,500 fine per offense.

"We are expecting that all 22,000 taxi units in Metro Manila will have their meters calibrated by May," Mr. Velasco said.

Early this month, LTFRB said flagdown rates will go up to P40 from P30 for the first 500 meters and an additional P3.50 from P2.50 for each succeeding 300 meters or two minutes waiting time. The fare hike ruling was published Jan. 5. -- A. M. P. Dagcutan


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REACTION

For sure, because of this economic problem nowadays, the demand for taxi for tansportation decreases. For some  citizens, they said that they will now use public utility vehicles as much as possible. They added that they will also ride a taxi only if emergencies happen and when they are in need of a fast tranportation to work or appointments.

Me, as an ordinary citizen who gets a taxi for trasportation most of time is very affected about this problem. Higher taxi fares were already implemented yet my allowance stayed the same. This issue will surely change my budget plan and tells me to start working out with public utility vehicles. However, this would also help me save more money and make jeepney drivers happy. They could get additional income from me, for I travel a lot everyday.

I felt sad really for the first time ai heard about the issue regarding this in the news. But for now, I can say that I already accepted the fact that economy really changes. I am now better than the first time I heard this. I am just thinking and I will continue thinking that this will help me in my budget planning though.