With PH now has world’s highest electricity rate – a forthcoming social ‘typhoon’, says ALU-TUCP

By Associated Labor Unions (ALU)
September 30, 2012

QUEZON CITY  –  Today’s largest confederation of labor unions in the country, the Associated Labor Unions-TUCP warns of workers’ unrest if the government fails to act on rising electricity rates after hitting an all-time high record of 13.66 pesos per kilowatt hour in Manila Electric Company’s (MERALCO) five million customers in the past thirty days.

“This development is alarming because it will hurt the already precarious income of workers. The rising cost of electricity, at the same time, scares new investors from coming in. And worse, it will force existing businesses to close shop and transfer to other neighbouring Southeast Asian countries where electricity is cheaper.

The ultimate impact is: more and more Filipinos will be jobless, or, more and more will be aspiring two jobs at one time for them to cope,” said Gerard Seno, ALU national executive vice president.

“Aside from losing jobs, the most painful effect of government powerlessness over high electricity rates is the fact that 6% to 11% of the workers’ monthly salary goes to their electric bills. This means they will pay more for the monthly electricity than their budget for food, water, fuel, tuition fees and other basic commodities. If this trend continues to surge, workers’ unrest is very apparent,” he stressed.

Monitoring of electricity rate made by TUCP Party-list Rep. Raymond Mendoza showed the Manila Electric Company (MERALCO) residential rates hit an all-time high of P13.66 per Kilowatt hour (kWh) beginning August. At a dollar equivalent of US$.33 per kWh this amount is the highest residential rate in the world surpassing those of Denmark and Germany, Italy, Austria, Ireland, Japan, Belgium and Netherlands at 22 to 32 US cents per kilowatt-hour.

On one hand, the electricity rates in neighboring Asian competitors Singapore, Indonesia, Thailand, and Indonesia are steady at 0.086 to 22 US cents per kilowatt-hour.

Seno stressed that the ALU and an employers group have been urging Energy secretary Jose Rene Almendras since last year to make drastic actions on the energy problems issue but there has been none thus far.

The Department of Energy (DOE) has announced that open access will be implemented next month. Under open access those customers with 1 megawatt load can now choose their power producer. However, the ALU and the TUCP Party-list shares the fear that once open access kicks in, the captive residential market faces the prospect of increased residential rates once Distribution Utilities lose their large industrial and commercial loads.

While open access promises to be potentially damaging to the interests of consumers, the ALU and the TUCP Party-list want to get a firm commitment from the DOE that open access will be held in abeyance until a comprehensive, national, multi-sector consumer impact assessment is undertaken.