Energy chief vows to make power rates more affordable

by Lenie LecturaJuly 4, 2016

from Business Mirror

ENERGY Secretary Afonso G. Cusi said he would form a focus group to zero in on issues related to providing affordable and reliable power rates, particularly in far-flung areas and, hopefully, be able to resolve this during his first 100 days in office.

The members of this focus group have yet to be named, he said. Cusi expects “immediate results” nonetheless.

During a news conference after the turnover ceremony on Monday morning, Cusi said he “will be busy” during the first 100 days. His priorities include the speedy delivery of cheap and reliable electricity to consumers, particularly those in the provinces.

“I am putting special focus to make it happen,” Cusi said.

One possible solution, he said, is to provide subsidy. “I am really looking into this.”

The Philippines remains among countries with the most expensive electricity prices in Asia. Based on a May 2013 “Global Benchmark Study of Residential Electricity Tariffs” by the Lantau Group, Manila has the third most expensive electricity prices.

According to the Manila Electric Co. (Meralco), the latest overall average electricity rate in its franchise areas is P7.58 per kilowatt hour.

Cusi said he is aware that in other countries, other governments subsidize electricity, while the Philippine government imposes many kinds of taxes.

“Others, they are receiving subsidy. That is one concern that we like to address. This requires a lot of studies,” the new Department of Energy (DOE) chief said.

A newbie in the energy sector, Cusi said he “need not be an energy man to be a leader” in order to accomplish his tasks as energy secretary.

“In management, everything is the same. It’s the subject that differs. In leading the DOE, I am looking from the prospective of the consumers.”

Cusi is a former Manila International Airport Authority (MIAA) general manager. He also served as chief of the Philippine Ports Authority and the Civil Aviation Authority of the Philippines during the Arroyo administration.

He also said that there would be a review on current policies involving energy mix, feed-in tariff (FiT) scheme and renewable energy (RE).

The DOE earlier issued a fuel-mix policy stating the country should source 30 percent of its energy requirements from coal, 30 percent from RE and another 30 percent from natural gas. The remaining 10 percent will come from oil-based power plants.

“I am asking ‘What’s the rationale?’ Why not 40-40-20? I’d like to understand the rationale behind,” he said, adding that the DOE should determine the right mix to balance the utilization of RE versus fossil fuels.

He said he is aware of the stand of the Climate Commission against coal-power plants and that of the newly appointed Department on Environment and Natural Resources (DENR) Secretary Gina Lopez.

“We can’t afford not to have coal. If coal is not the solution, what is the alternative? We have to find a balance. If it’s RE, why not? But we have to be realistic,” Cusi said. “We will discuss that. We have to help one another find the solution.”

On concern related to the FiT rate for solar power projects, Cusi said many solar-power providers, whose projects did not make it to the second round of FiT rate, are asking for a meeting with him.

“How are we going to handle this? What are the options? Maybe competitive bidding or bilateral contracts with distribution utilities or through the open market, we don’t know. We have to study that.”

He said DOE officials have 10 days to closely study this before Cusi can attend to the concerns of the solar-power providers.

“Can solar be feasible without FiT?” he said. “It requires a deeper study and understanding.”

On reliability of the power plants, many of which are on unscheduled shutdown from time to time, Cusi said there is a need to revisit the service contracts of the plant operators to determine their compliance.

The DOE chief also said there had been initial discussions with the World Bank to fund a study on a plan to convert the Bataan nuclear power plant into a receiving and distribution facility for liquefied natural gas.

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