22 Apr 2005
The National Power Corporation (NPC) and the Power Sector Assets and Liabilities Management Corp. (PSALM) will comply with the decision of the Energy Regulatory Commission (ERC), which granted an additional nationwide average adjustment of P0.4795 in the electricity rates of NPC.
“Although this is significantly less than the original average rate that PSALM and NPC filed for, the amount granted will help address NPC’s operational losses. The new rate approved by the ERC will be faithfully implemented,” PSALM Officer-in-Charge Maria Luz Caminero said.
The new rate is estimated to generate an additional P9.728 billion for NPC.
In addition to the rate increase, NPC has also implemented other measures to improve its financial condition. From its manpower reduction in 2003, NPC has realized savings of some P752 million. NPC has trimmed down its workforce from more than 8,000 in 2001 to only 3,800 in 2003 to create a lean and mean organization. Ms. Caminero pointed out that further streamlining of operations is underway.
Ms. Caminero said the rate adjustment will also help accelerate reforms in the electricity industry.
“The rate adjustment will facilitate the restructuring of the electricity industry and the privatization of NPC’s power plants. Power generation will now become a more viable industry, and will encourage investments. We must remember that the rate adjustment is just one, but nevertheless very important, component in the restructuring of the electricity industry. In a restructured and privatized electricity industry, consumers will also have the power to choose among electricity suppliers offering competitive prices,” she explained.
“In the medium-term, the adjusted rate will enhance the value of power plants that are up for privatization, which means that government stands to get a higher price for these assets. Since the privatization proceeds will be used to pay off NPC’s obligations, higher proceeds will mean a lower financial burden for government and the Filipino people,” Ms. Caminero added.
PSALM is the government corporation mandated by law to privatize government’s electricity assets. It plans to pursue an aggressive schedule to privatize 70% of NPC generating assets in Luzon and Visayas by the end of the year.
Strategic Communications and Partnership Division |