Finance Minister Jose Lois Malkum advised the press that the government is engaged in talks with the private power companies in a quest to find an alternative solution to the projected 20-percent increase in next month?s electric bills. The cost of power is indexed to the rises in production costs, taking into account the soaring cost of oil, the peso-dollar ratio and inflation. Because this 20-percent rise in electricity bills is so much higher than last month?s 12 percent, the government is proposing that the power generators and distributors absorb the new components affecting the cost of electricity. Last August, the government eliminated the cap on electricity prices, letting the price float to reflect actual cost increases. This resulted with increases of 50 to 200 percent in residential and industrial consumer bills over the past six months.
The government recommends that the augmentation not be passed along to consumers, but, when the costs of production deflate in coming months, that the producers should be allowed to maintain the present rates until they have recouped their lost revenues.