Lower TransCo rate eyed
Tuesday, December 05, 2006
By Elaine Ruzul S. Ramos
The Philippine Chamber of Commerce and Industry has urged Power Sector and Assets and Liabilities Management Corp. to require all prospective bidders of National Transmission Corp. to draw up a scheme that will reduce transmission cost and eventually lower the cost of electricity in the country.
PSALM will bid out a 25-year lease contract to operate and maintain TransCo, operator of the country’s electrical highways.
In a letter to PSALM president and chief executive Nieves Osorio on Nov. 29, PCCI president Donald Dee said PCCI was gravely concerned that the government might have lost sight of the underlying objectives of the Electric Power Industry Reform Act.
“In the ongoing privatization of TransCo, we strongly recommend that the goal of maximizing public welfare be made paramount. This cannot be achieved by just maximizing the government revenues from such privatization because these will eventually be recovered from the consumers,” Dee said.
He said PSALM must require bidders to offer the highest price for the contract as well as submit plans to reduce transmission costs, which account for 6.35 percent of monthly electricity bill for residential consumers and 5.35 percent for industrial users.
“The evaluation of bids [should] not be based solely on offer price but a combination of price and lowest cost to the consumer,” Dee said.
He said privatizing the power industry was an important and challenging mission of PSALM because of far-reaching consequences.
“PCCI is gravely concerned that the leadership of government might have lost sight of these goals that would promote public welfare and are focused on maximizing revenues in the privatization process,” Dee said. “We have pointed these out in various fora including the summit on competitiveness where PCCI recommended concrete measures on how to reduce the high power rates, which hamper the viability of many domestic enterprises.”
PCCI was invited as observer in the recent pre-bidding conference on TransCo’s privatization.
“We are confident that PSALM in coordination with our economic planners could formulate criteria whereby public welfare is optimized. We look forward to the timely advice to the bidders of this approach so that they could design their proposals accordingly,” he said.
Energy Secretary Raphael Lotilla, Socio-Economic Planning Secretary Romulo Neri and Energy Regulatory Commission chairman Rodolfo Albano Jr. were furnished copies of the letter.
posted by philpower @ 11:49 AM,
