Senate panel eyes changes in power industry law
Tuesday, September 21, 2004
THE SENATE economic affairs committee reached consensus Monday to call for amendments to the Electric Power Industry Reform Act (EPIRA) to give industries, especially the electronics sector, a reprieve from high electricity prices, its members said.
Electricity cost, the second highest in the region after Japan, is said to be one of the main deterrents to business expansion in the Philippines.
At a hearing Monday on the economic impact of the President Gloria Macapagal-Arroyo's revenue generation proposals, Senator Ramon Magsaysay Jr. called for a resolution to amend the EPIRA so industries can get their electricity directly from National Power Corp. (Napocor) or its independent power producers rather than from distributors.
If adopted, the amendment will affect publicly listed Manila Electric Co. (Meralco), other large private distributors, and rural electric cooperatives.
Senator Juan Ponce Enrile called for deleting a provision in the EPIRA that says "open access" -- sourcing of electricity directly from power generators like Napocor -- will not be allowed until 70 percent of Napocor assets are privatized.
"If we will simply delete this one sentence in the EPIRA law, then we can already have open access," Enrile said.
The government estimates that the Napocor privatization process can dispose of 70 percent of its assets in 2006.
The consensus in the Senate committee to move for EPIRA amendment came after officials of the Semiconductor and Electronics Industries of the Philippines (SEIPI) said the electronics sector was losing out to foreign competitors because of the high cost of doing business in the country, largely brought about by expensive electricity.
SEIPI executive Dan Lachica, president of semiconductor maker First Sumiden Circuits Inc., said that while global demand for semiconductors and other electronic components grew by 25 percent a year, the Philippine industry was growing by only eight percent.
He added that the Philippines was losing big investment opportunities to China largely because of high electricity costs.
He cited for example a semiconductor company that used to employ 2,000 workers and had to close down because of high costs.
He added that some multinational companies had reduced their growth target this year from over 50 percent to only 10 percent because power costs were expected to increase. With INQ7.net
posted by philpower @ 9:02 AM,
