This crisis comes with alternating increases in electricity rates as summer looms. As of this writing, the Philippines stands in the roster of countries as one with the highest electricity cost.
The problem is, the price spike doesn’t seem to jive with the lowering of fuel costs internationally. More so, it doesn’t help that government’s main reason for imposing numerous taxes on electricity generation and distribution is all for show, “to protect the country’s credit rating.”
This would put the Philippines as one of the countries with the highest cost of doing business. In fact, the European Chamber of Commerce of the Philippines raised concerns as to what must be done should the power crisis become extreme.
In their website, one of the proposals was to push “more participants in the Interruptible Load Program (ILP)—targeting those with large embedded generation capacities, such as malls, large business establishments and factories.”
The ILP participants “must we willing to run their generators for about 10 hours a day during times of extreme shortage of power”.
The proposition of Department of Energy (DOE) secretary Carlos Jericho Petilla to grant the President emergency powers so he could address the power crisis has come under scrutiny from the public. Petilla cited Section 71 of the Electric Power Industry Reform Act of 2001 as justification for Pres. Aquino’s emergency powers in order for him to tap additional electrical capacity.
The problem with the proposition is that the ILP participants could further increase the cost of electricity than make it affordable.
The crisis will surely put the Philippines as one of the countries where the cost of doing business would be prohibitive. Business will be compelled to spend their capital on fuel and generators, rather than expansion.
To equalize productivity, companies will have to spend extra on personnel wages, extra machinery, operational costs, better security protocols for banks and lower profit margins. Maintenance, replacement and repair of damaged machinery due to power fluctuations could add to the expense.
In the end, the DOE must quit pussy-footing and do its job. Because any attempt to improve the country’s gross domestic product will fall by the wayside for sheer incompetence in the ways of power.
Source: Business Mirror
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