MANILA, Philippines — A Malacañang directive is being sorted out at the Cabinet’s economic cluster to lay the legal framework for the proposed alternative solution in extending the discounted electricity rates for economic zone locators.

In a briefing with the media, Energy Secretary Rene D. Almendras indicated that issuance of an executive order is being considered, but options like a Circular from the Department of Trade and Industry (DTI) or Board of Investments (BoI) may also be worked on.

“There would be some details (on the ecozone rate extension), but I do not want to pre-empt until a final EO is signed by the President,” the energy chief has noted.

He further indicated that “there’s a planned series of (Presidential) orders. I’m not sure if it is an Executive Order or BoI circular. As I said, it is now with the DTI/BoI wherein certain matters are being discussed.”

Almendras has qualified that the task of packaging the extended discount rates for ecozones has already been tossed to the trade and industry secretary; especially so since state-run power firms (i.e. Power Sector Assets and Liabilities Management Corporation and National Power Corporation) already gave word that they can no longer supply power for the requirements of the ecozones.

“Since it is not an energy program, it is an economics incentive and job generation program, then rightfully it should be with the DTI, particularly BoI and the PEZA (Philippine Economic Zone Authority) … the lead agency there would be BoI/DTI. We agreed with Secretary (Gregory) Domingo that options will be explored. We call it the economic cluster options,” he averred.

On alternative supply sourcing, the energy chief stressed with certainty that it will no longer be with PSALM or NPC, rather “there would be commercial contracting involved …but there would be some price differentiation.”

Almendras is just certain at this point, that “there is a solution that is being looked and that will hopefully address the issues of these companies that are enjoying those benefits.”

He hinted that it could be a “transition type” of solution that would bridge the industrial end-users’ bid for cost-competitive rates until the more permanent options are in place, such as the realistic and full implementation of open access and retail competition in the restructured power industry.

“I think the pronouncement of Secretary Domingo is that there is a solution that is being looked at and that will address the situation until such time that ‘open access’ will happen sometime in October next year,” Almendras has emphasized.

It must be culled that the soon-to-expire Ecozone and Customer Choice Program, which is also known as the time of use (ToU) program, has been assigned to South Premiere Power, a subsidiary or affiliate of San Miguel Energy Corporation which is the independent power producer administrator (IPPA) for the 1,200-megawatt Ilijan natural gas-fired power plant.

Stakeholders involved in the discussions noted though that, so far, government discussions relative to the power rate discount extension are not involving the power company.

PSALM, for its part, justified that it can no longer be in the program because this will add in to its monstrous operating losses. Its estimate has been that this will redound to P10 billion losses for January to September 2012 alone.