Philippines launches time-of-use electricity pricing scheme for private sector

MANILA, Apr 04, 2005 -- AFX-Asia

After launching a four-day work week for its employees to cut energy consumption amid record-high oil prices, the government is now encouraging private companies to do their part by shifting some of their working hours to evenings.

Energy Secretary Raphael Lotilla said the state-run National Power Corp has launched a time-of-use pricing formula which offers cheaper rates for electricity purchased at night until early morning when electricity demand is at its lowest.

The intention, he said, is to reduce electricity-intensive activities in the morning to enable Napocor to use less of its oil-fired power plants. The financially distressed power firm spends around 32 bln pesos a year to run its oil-fired power facilities.

Oil prices touched a new record high of 57.79 usd a barrel in Asian morning trade on worries over US refining capacity and the continued fallout from a study that indicated prices could eventually reach 100 usd, dealers said.

"We are looking at other measures to encourage the private sector to join (the government's energy conservation program) as well," Lotilla told members of the Foreign Correspondents Association of the Philippines at a forum.

The share of oil-based plants as a source of electricity had fallen to 15 pct at end-2004 from 20 pct in 2000 following the start up of two natural gas-fired power plants on Luzon island.

Meanwhile, Lotilla said the government is also looking at implementing new traffic management schemes, as well as increasing taxes on vehicles to save on oil consumption. He did not elaborate, saying these are beyond the control of his department.

Some 200 buses using compressed natural gas would also be plying major thoroughfares in the capital Manila later this year in line with government's intention of promoting alternative sources of energy to reduce oil imports amid rising oil prices, Lotilla said.

Lotilla, who previously headed that Power Sector Assets and Liabilities Management Corp (PSALM) before taking over last month as new energy secretary, said Napocor's time-of-use pricing formula should also help solve the looming power shortage, which is seen hitting the country by 2008.

PSALM is the agency undertaking the privatization of Napocor's power plants and transmission facilities.

"The 2008-2009 shortage is in terms of peak demand, so if we can shift demand to off-peak hours, we can avoid a power crisis," Lotilla said.

The country needs an additional 6,000 megawatts in generating capacity over the next 10 years to keep up with growing demand and to stave off expected power shortages.

(1 usd = 54.8 pesos)

cecille.yap@xfn.com/cey/mb

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