“Meralco’s critics … are off-tangent in their arguments for lower power rates in the Philippines.”
The path towards a greener energy future is not that difficult to take if one is dead set on pursuing it. An earth-friendly power source, to begin with, is sustainable and cheaper than fossil-based fuels that pollute the atmosphere.
The nation’s biggest retailer of electricity—Manila Electric Co.—is taking an active stance to achieve the twin goals of reducing greenhouse gas emissions and lowering the electricity prices of consumers.
It plans to reduce its 2030 direct emissions by more than 20 percent as part of its move to become coal-free before 2050. Meralco is now aiming to secure 22 percent of its supply portfolio from RE by 2030, with supplier MPower Inc. accounting for 18 percent by 2025. The utility, as part of its sustainability agenda, has already contracted 1,880 megawatts (MW) of RE capacity from several suppliers, exceeding initial target of 1,500 MW.
Meralco’s critics, thus, are off-tangent in their arguments for lower power rates in the Philippines. Poor generation capacity and transmission infrastructure are keeping rates prohibitive in the country.
Calls to split Meralco’s franchise without any plan to actually address the rates situation in the Philippines are outlandish. Filipinos pay for the true cost of electricity in the absence of a subsidy, unlike in other nations. Private distribution utilities and electric cooperatives here break their backs to source the least cost possible energy supply despite global and local challenges, such as aging power plants that threaten our country’s energy security.
To reiterate, reducing electricity rates will not be achieved by simply splitting Meralco’s franchise. Lower power generation and poor transmission facilities will persist.
Building more power plants and strengthening the current transmission infrastructure appear to be the more relevant issue. After all, generation and transmission account for the bulk of a customer’s monthly bills.
Blaming Meralco for the high cost of power because of its sheer size compared with other electricity distributors is misplaced. Instead of singling out Meralco, lawmakers should look for ways on how to improve the electricity service and rates of all electricity distributors in the country.
What the power industry needs are innovative solutions to improve supply and services. Meralco’s intent to study the potential use of cheap nuclear energy, for one, supports the government’s push for energy security.
Out-of-the-box proposal
Speaking of innovative solutions, Rep. LRay Villafuerte, who heads the National Unity Party (NUP), sincerely believes the government can flood the market beginning 2024 with rice costing just P20 per kilo for the poor and other vulnerable sectors, and a slightly higher per-kilo rate of P30 for the rest of Filipino consumers.
Mr. Villafuerte is looking at the judicious use of the roughly P40 billion that the government sets aside annually for subsidies to the rice sub-sector to pull down the cost of rice to P20 a kilogram (kg) beginning next year.
His subsidy-cum-contract-growing idea is anchored on making small farmers in the country’s top 10 palay-growing provinces harvest a combined 5 million metric tons (MT), or 5 billion kg of our staple food, by the end of the next planting season in 2024.
Under his proposal, the projected yield of 5 billion kilos at the end of one planting season would enable the Marcos administration sell 1.5 billion kg of rice at P20 a kilo to poor and low-income families, and another 1.5 billion kilos at P30 to the rest of consumers.
With the government spending about P40 billion in yearly subsidies on the rice sub-sector, Villafuerte has proposed to newly-appointed Department of Agriculture Secretary Francisco Tiu Laurel Jr. to consider using the huge fund as subsidy to small farmers tilling an initial total land area of one million hectares (ha) in the Top 10 producers in the country.
The fund is to be used as a financial aid of P40,000 per hectare to every target farmer-beneficiary in the biggest palay producers in the country.
“Contrary to the contention of our agriculture officials that selling rice at P20 a kilo, although possible, cannot happen in the near future, market rates of P20 and P30 a kilo are actually doable starting next year, if we were to adopt now a novel palay productivity program involving the grant of a pre-planting subsidy of P40,000 per hectare to target farmer-beneficiaries tilling a total of a million hectares in our 10 biggest palay-producing provinces, but on condition that these farmers sell their produce to the government at P9 a kilo,” said Villafuerte in the statement.
Under the Villafuerte proposal, farmer-beneficiaries will be required to sell their produce to the government at a fixed rate of P9 per kg of palay, which means the state will have to set aside P45 billion for this proposed procurement component of the subsidy plan.
Buying the farmers’ produce after already giving them P40,000 each before the start of the planting season would encourage the target beneficiaries to produce more from their respective farms as they will be paid P9 for every kilo of palay they are able to produce.
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