New tariff system proposed to reduce power costs

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THE Philippine government should seriously consider a new tariff system in order to bring down the country’s electricity rates.
This was the advice given by Christoph Frei, secretary general of the World Energy Council (WEC), amid concerns that Philippine power rates are among the highest in Asia.

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“What can be done is, which other countries do, to come up with a very creative tariffication that will bring down demand, that’s the quickest solution,” he told The Manila Times on Friday.

A report issued in 2013 by the National Statistical Coordination Board (NSBC) said electricity rates in the country are among the highest in the region.

The NSBC cited data from the Asean Center for Energy which showed that among the 10 countries in Southeast Asia in 2007, the country ranks as having the third highest residential electricity tariffs, fifth highest for commercial, and fourth highest for industrial electricity tariffs.

The best solution to high power rates and power shortage is to build more infrastructure, Frei said.

“There are a lot of projects in the buildup but it simply takes time. If you have to build up infrastructure, it needs time,” he stressed.

Business groups have cited the high power costs in the Philippines as a major disincentive for foreign investment.

Frei said the Philippine government should look for relatively cheaper options when it comes to power generation. “I think you need to be open to all options, that’s the reality today.”

In particular, he said the government should explore renewable energy more, such as hydropower.

“You have many islands, I think renewable is the cheapest option,” he said.

 

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