Monday, May 5, 2008

Privatize Napocor and Electric Rates Will Be Reasonable

Cong. Teofisto “TG” Guingona III
2nd District, Bukidnon
May 5, 2008

Privatize Napocor and Electric Rates Will Be Reasonable All of us, whether Administration or Opposition, want electric rates to go down. But do you know that generation charges make up sixty percent (60%) of our total electric bill? So, if we bring down our generation charge, we will bring down our total electric bill dramatically. The solution is in implementing the EPIRA law. EPIRA mandates that by 2009, seventy percent (70%) of NPC owned or controlled electric generating capacity should be privatized[1]. One of the purposes of EPIRA was to ensure affordability of supply of electric power[2], as well as transparent and reasonable rates, through a regime of free and fair competition[3]. Today, seven (7) years after EPIRA has become a law, NAPOCOR still owns or controls seventy percent (70%) of generating capacity. Prior to EPIRA, it owned or controlled ninety-five percent (95%) of generating capacity. This means that it took them seven (7) years to privatize twenty-five percent (25%). This is obviously too slow. That is where the cause of high electric rates lies: monopolistic dominance of NAPOCOR of the generation of electricity. The evil of this monopolistic dominance is obvious. Tingnan na lang natin yung nangyari sa WESM noong Agosto 2006[4]. Itong WESM ay isang palangke, pero sa halip na pagkain ang ibinibenta, kuryente ang ipinagbibili. Nahuli ng manager ng palengke ang NAPOCOR na nagbigay ng instruksyon sa kanyang mga planta na kailangang magkasabwatan sa pagtaas ng presyo ng kuryente. Parang pumunta ka sa palengke at gusto mong bumili ng galunggong. Sa palengkeng iyon, tatlo lang ang tinderang nagbebenta ng galunggong, si Neneng, si Selya, at si Doray. Wala nang iba. Pagdating mo sa palengke, napansin mo na napakataas ang kanilang presyo at pare-pareho. Yung pala, magkapatid sila at ang kanilang ama ay si NAPOCOR. Nadiktahan sila ng kanilang ama. Ganoon din po sa kuryente, nakakadikta ang NAPOCOR ng presyo ng kuryente sapagkat ito ang may-ari o kontrolado niya ang pitumpong porsiyento (70%) nito. The solution to lower electricity rates is genuine competition amongst private generation companies in a regime of free and fair competition on a level playing field. Privatize NAPOCOR and electricity rates will be reasonable.
[1] sec. 47-I, EPIRA [2] sec. 2-b, EPIRA [3] sec. 2-c, EPIRA [4] Market Surveillance Committee Report, dated Nov. 20, 2006, addressed to the Board of the Philippine Electric Market.


enzo from PLM said...

being maybe the most important element in the household, a family cannot survive without electricity. which comes to the sad fact that electricity rates are at an all time high. Which is why we really need to privatize electricity sources. right now the way we purchase electricity is just the same as gasoline. one of the providers will raise the price and the others will follow, its sort of an agreement, a "cartel", this leaves us consumers unprotected. our purchase power violated. but just as mentioned above, since NAPOCOR has the monopoly in electricity , they pretty much control the rates. the EPIRA law
is developing rather slow, to be able to solve the problem of electricity rates, it should be given a really big boost.

Charmaine said...

Our country has been experiencing too much torture already. With the scams, rice crisis and all, who wouldn't want to have their electric bills go down?

Cong. TG Guingona has a very good point: there has to be a genuine competition. The monopoly in the supply of electricity has to come to an end.

After all, I believe a lot more people would be benefited if this happens.


I can seen that the aim (here) is to lower the price of electricity mainly through competition and destroying a seeming ‘monopoly’. In the end, how do we assure ourselves that the “private generation companies” won’t be reasons of concern in the future where these companies “gang-up” to raise electricity rates? I see vigilance as one, but what about measures that must be taken in terms of the legislative process?

What about the situation where one “private generation company” raises its rates, prompting the others to follow, like what we see in oil companies today? Of course, oil companies are ‘dictated’ (as we are told) by the trend of prices in the global oil market. Then again, the point I want to raise is the parallel between oil companies triggering a domino effect in oil prices after one company raises its prices and so-called “power generation companies”?

Louie said...

Upon reading the entry, I was somehow informed on the real story behind the EPIRA Law. Things like this should always be exposed to the public for it could help them assess what kind of system their country does have.

Based on the explanation stated above, privatization of NAPOCOR seems to be the last best hope of the country and the millions of Filipino people suffering from the high prices of electric consumption and of the continuous inflation rate experienced by the nation.

Also, it describes how slow the government acts on the problem and how conceited some of them are to let these things happen

Kudos to those few people who have that labor of love and are really concerned in their countrymen; and for letting them be informed in the true picture of the situation.

dickson said...

Everyone seemingly suffers from such monopoly of NAPOCOR to our electric resources, especially those who hardly earn their meager income. Personally, I think NAPOCOR sometimes take advantage of the fact that they have no competitor in the line of service, hence their subscribers (which is literally all Filipinos) have no choice but to give in to whatever decision they would have in pricing our electric consumption. Having said that, if they would choose to increase electricity consumption price, we are left with no choice but to pay our unreasonable electric bills. I just hope the EPIRA law would work out sooner so as to put off the monopolistic dominance of NAPOCOR to the generation of our electricity.

Philip Jarina said...

Be careful of what you ask for. NAPOCOR can be audited by COA. But a private company like Meralco cannot be audited effectively, even by ERC. Whatever happened to GSIS Winston Garcia's efforts in getting Meralco to be audited should not be ignored or forgotten. It's easy for a private company like Meralco to pass on expenses or losses to the consumers while keeping a good profit without any accountability.
Yes, Philippines has the world's 2nd largest geothermal capacity. It should be able supply Asia's cheapest electricity. Electricity is expensive because of system loss. Privatization may even worsen electricity prices.
Think it over.

Philip Jarina
Free Continuing Education for Electrical Engineers