GMA seeks passage of measure on reduced PPA

President Arroyo has asked Congress to pass into law a bill that would reduce the controversial purchased power adjustment (PPA), which constitutes the bulk of a household or factory’s electricity bill.

Energy Secretary Vincent Perez said the Chief Executive has approved the draft of the administration bill that would strengthen the Power Sector Asset and Liability Management (PSALM) to enable it to absorb the PPA, or excess power paid for but not used.

Perez said the Electric Power Industry Reform Act (EPIRA), which created PSALM, needs to be amended to empower the government firm to assume the PPA.

"We have already prepared legislation which would strengthen the PSALM as an agency of the government that can finance the payment of excess electricity that is now being charged to consumers through the PPA," Perez said.

"We found a way through which the government can assume payment of the PPA. But instead of consumers paying for it right away, we will amortize it over a period of time," he explained.

Under the draft bill, PSALM will be converted into a "special purpose company" that will assume the PPA that the Meralco pays to the National Power Corp. (Napocor) and passes on to consumers.

Since consumers will not have to immediately pay for the PPA, electricity bills are expected to go down by as much as 80 centavos per kilowatthour, Perez said.

"It is important that we be able to pass this into law within the remaining session days of Congress," he said. "Hopefully, we can implement this much desired reduction of the PPA before Christmas."

Perez said he has already met with Sen. Renato Cayetano, chairman of the Senate committee on energy and member of the body which serves as oversight committee for the implementation of the EPIRA, on how to shepherd the bills through Congress.

But opposition lawmakers assailed the Arroyo administration for tossing responsibility for the PPA to Congress.

"The President should not pass the buck to Congress. The buck stops at her office and besides, there is a panel that was created by Congress, which is under the President, to review the power contract agreements that were entered into during the period of emergency," said Senate minority leader Aquilino Pimentel Jr.

The PPA was conceived by the administration of then President Fidel Ramos during the energy crisis of the early ’90s to make it easier for power distributors, like the Manila Electric Co. (Meralco), to pay for the electricity they buy from independent power producers (IPPs).

The PPA was included in the contracts with the IPPs so that foreign investors would be encouraged to build new power plants. However, the system has been tagged as the principal cause of high electricity bills – one of the highest in the region.

Opposition Sen. Blas Ople said that aside from passing responsibility, the President has also failed to heed the people’s demand that the PPA be suspended.

Pimentel blamed Finance Secretary Jose Isidro Camacho, who chairs a three-man inter-agency committee tasked to review more than 40 IPP contracts and recommend their renegotiation or revocation.

"(The President) should bang the head of Mr. Camacho so that the committee can come up with its recommendation to abort the heavy burden that is now being shouldered by the people as a result of these onerous PPA fees," Pimentel said. – With reports from Jess Diaz, Aurea Calica