• Business groups press Aquino on power supply security


    Nine major business organizations are urging President Benigno Aquino 3rd to define power supply security and competitive power rates, two major government initiatives which they said should also involve the private sector in helping speed up industrialization and achieve inclusive growth.

    In joint a letter sent to the president over the weekend, various local business groups and foreign chambers of commerce emphasized that the Department of Energy (DOE) should not be left alone to figure out how to address the power supply issue but that the entire economic cluster should act as a team in evaluating the situation and strategizing on how to achieve these goals.

    They pointed out the importance of having a clear program for achieving reasonable and competitive power rates as key to accelerating industrialization, bringing in significant foreign direct investments, creating employment opportunities and realizing sustainable and inclusive economic growth.

    The business groups said the economic cluster should be able to respond to the challenges with a broader perspective and mindset, giving full consideration of the real and apparent successful strategies of the Philippines’ neighbors in enhancing the business environment by providing more competitive power rates.

    They also pointed out the importance of fair competition toward achieving the goals of power security and competitive power rates.

    The business groups which signed the joint letter to Aquino consisted of the Philippine Chamber of Commerce and Industry (PCCI), Alyansa Agrikultura, Chamber of Mines of the Philippines (COMP), Employers Confederation of the Philippines (ECOP), Philippine Exporters Confederation (Philexport), Semiconductor and Electronics Industries of the Philippines (SEIPI), American Chamber of Commerce of the Philippines (AmCham), European Chamber of Commerce of the Philippines (ECCP) and the Korean Chamber of Commerce of the Philippines (KCCP).

    The groups said the private sector is ready and enthused to support actions to resolve the situation, but there is need for the national leadership to clearly define the national policy and strategic objectives concerning the two critical issues of power supply sustainability and reliability and regional competitive power tariff. They said this should include reasonable target timing and accountability.

    Specifically, the business organizations submitted the following long-term recommendations:

    In terms of power supply security, the group suggested to have a national power supply roadmap specifying, among other things, the required power plants, their configurations (fuel type, size, etc.), locations, and schedule of operations; and a regular and transparent power supply bidding process that will cover base load, peaking, and reserves.

    On competition, developing programs and processes that ensure fair and transparent competition among stakeholders on the supply side and increasing the market power of various distribution utilities in order to create fair competition and increase power supply security.

    Over the medium term, the business groups called for the following:

    Creation of a forward market by requiring distribution utilities (DUs) to contract 100 percent of their forecast energy requirements for the next three years and no less than 90 percent for seven years thereafter, subjecting these to competitive public auctions;

    Creation of a forward market and the establishment of such either at the Wholesale Electricity Spot Market (WESM) or under a trading platform operated by industry stakeholders and duly accredited by the private sector, subject to market rules prescribed by the DOE.


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