‘Higher power rates bad for Mindanao economy’

MALAYBALAY CITY (MindaNews/16 April) – Increasing the power rates in Mindanao will have “dire consequences” on the island’s economy, as its present rates are already high compared to those in key cities in Asia, a lawmaker today warned.

In a statement, Bayan Muna Rep. Teddy Casiño also said that President Benigno Aquino III’s premise that Mindanao has been unjustifiably enjoying cheap power rates is “totally wrong.”

“True, Mindanao has lower power rates than Luzon and the Visayas. But Mindanao is actually paying much more than most major cities in Asia. In fact, residential consumers in the Autonomous Region in Muslim Mindanao (ARMM), Cagayan de Oro City, Northern Mindanao, and the Davao and Caraga regions are paying twice the electricity rates of residents in Seoul and Beijing,” he said

Latest available comparative data show that Mindanao has an effective residential rate of P6.69 per kilowatt-hour (kWh). Luzon has P9.84 while Visayas has P8.19, Casiño said, citing the 18th EPIRA Implementation Report.

But he pointed out that except for Caraga, all the Mindanao regions mentioned above have more expensive residential power rates than Hong Kong.

“These areas in Mindanao, plus Cotabato City, Iligan City, SOCCKSARGEN, and the Zamboanga Peninsula all have higher residential rates than major Asian capitals like Taipei, Kuala Lumpur, Jakarta, New Delhi, Bangkok, and Shanghai, among others. All in all, Mindanao is paying an average of P1.82 per kWh more for electricity than the 31 major cities in Asia and Oceania surveyed by Japan External Trade Organization (JETRO),” Casiño said.

He warned that making Mindanao’s power rates at par with those in the Visayas and Luzon will make the island lose its competitive edge.

“Good public policy dictates that power rates should be kept as low as possible to spur investments and keep prices of commodities low. But the President’s policy is to increase prices to attract private power firms whose objective is to sell power at the highest possible rates. It’s just crazy!” the lawmaker said.

Casiño accused the President of “favoring private power firms that want high prices instead of consumers who want low prices.”

“He should also see that Mindanao is different from Luzon and the Visayas considering that a large percentage of its power comes from hydropower that is cheap,” he added.

“It is tragic that Mindanao’s reliance on hydropower is seen as a problem rather than the solution to the crisis. For so many decades, it has been the government-run hydropower plants that have kept prices low in Mindanao. The solution is to increase and further develop this cheap source of renewable energy, not replace it with expensive and dirty diesel and coal plants owned by private companies,” he stressed.

He cited the case of Norway and New Zealand which rely 90 percent and 66 percent, respectively, on hydropower. (MindaNews)