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electricity
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electricity
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The Country's Problem (Part I): Electricity and The Reasons Why It's Expensive
It is stated that Philippines have the highest energy fee, surpassing the country which has the most expensive energy rate in Asia; Japan. But how did we end up with our bills rising from hundreds to thousands?
Dr. Gerardo Sicat, a Filipino economist, stated four reasons why Philippines has expensive electricity fee with his interview in Manila Bulletin.
The first reason is the high generation costs due to high cost of contracts with independent power producers (IPPs). The government used this method at the height of energy crisis in the 90s. However, despite this so-called solution of the government, he stated that Philippines still imports oil with unpredictable prices from foreign countries. Thus making our expenses rise unpredictably as well.
Second is due to monopoly of the generation and distribution levels. This statement mainly hints the only company managing the surge of electricity, MERALCO. He stated that it can take advantage of their monopoly power by charging operating expenses and paying back of loans.
Third reason is the high system losses of electricity distributors including MERALCO which are paid by consumers. He cited that Philippines are paying twice on system losses than South Korea’s average cost.
The last reason is poor management. Everything about their maintenance has been passed along the consumers as well.
Even if Philippines rely on the newly discovered energy resource in Palawan, the domestic natural gas from the Malampaya gas deposits were tagged with a luxurious price too and it won’t help on decreasing the electricity rates.
The government should think of a better solution to drop down the Philippines electric rates by not relying too much on the helping hands of the foreigners.
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