RP: Asian power rate champ

DIE HARD III
Herman Tiu Laurel
08/06/2010



The following are the latest comparative power rates in Asia, culled by the National Association of Electricity Consumers for Reforms (Nasecore) in US$/kWh terms, which we presented in our recent Global News Network (GNN) program on the subject, “Meralco Caught Overcharging Again:”

Jakarta 0.06

Shanghai 0.07

Singapore 0.21

Kuala Lumpur 0.06

Tokyo 0.20

Manila 0.23

One of our other guests, former Quezon City Mayor Jun Simon, also culled some additional figures (in US$) from his siblings in North America:

Vancouver 0.07

Los Angeles 0.11

If you are already incensed at the gross disparity, wait till you learn that power rates in the Manila Electric Co. (Meralco) franchise area (at P11.98 per kWh) are much higher than those of rest of the country — from Iligan’s P6 per kWh; Cagayan de Oro’s P8; Misamis Oriental’s P7; Cebu’s P7; to Javier, Leyte’s P5.

Dominant player Meralco seems to be of the view that it is exempt from the rule that the higher the sales volume, the lower the price.

Thus, the poverty-stricken Philippines under PeNoy Aquino now has the distinction of having “The Highest Power Rate in Asia,” up from the achievement of Gloria Arroyo over the past nine-and-a-half-years. While Arroyo’s last few months did usher in these highest power rates, these are due to what’s claimed to be simultaneous misfortunes of low water levels in the Luzon hydro-electric dams (resulting from the over-release of water during typhoons “Ondoy” and “Pepeng”) and, strangely, supposed breakdowns or maintenance operations of several power plants in Mindanao.

PeNoy, on the other hand, cannot escape responsibility for this “highest power rate” ignominy primarily because he failed to include in his State of the Nation Address (Sona) a denunciation of the nefarious methods used by Meralco and its rubber stamp public agencies such as the Energy Regulatory Commission (ERC), Wholesale Electricity Spot Market (Wesm) and Philippine Electricity Market Corp. (PEMC) — with convoluted acronyms designed to confuse — to legalize this price-gouging.

Judging from the 2008 per capita income alone of the three Asian countries with the highest power rates shows how the Philippines’ sore thumb is sticking out. With our highest power rates, our country’s per capita income is only at $1,866; while the second and third placers, Singapore and Japan, are at $38,578 and $39,423, respectively.

Clearly, the Filipinos’ buying power is at least 20 times smaller than the Singaporeans and Japanese. But, even when compared to the industrialized economies of the West, the Philippines still beats them all in terms of power rates — from Brussels’ $0.10/kWh; Paris’ 0.11; Rome’s 0.12; Sydney’s 0.14; to London’s 0.19.

Indeed, RP’s Meralco rate matches Frankfurt’s $0.23/kWh; and only New York ’s $0.29/kWh beats it. But, not to worry, the pending Universal Charge covering “stranded costs” and “stranded debts” to be left on the shoulders of National Power Corp. (Napocor), the taxpayers, and consumers by the successive Yellow regimes’ privatization program can still bring our country’s Meralco rates to the top of the world!

If by any chance the Universal Charge doesn’t make RP’s rates the highest in the world, then the new, perverted rate-setting scheme called the Performance Based Rate (PBR) system, which sets rates based on projected improvements in service to be made by the power utility company, upon which Meralco has already submitted rate hike petitions for 2011 onwards, may just do the trick.

This is the only system we’ve seen where increases in public utility rates are based on “prospective” instead of actual performance. Now Meralco can easily charge its capital requirements for these “prospective” capital expenditures to its hapless consumers, upon approval by the ERC, of course (which is really never denied). Can anybody in the world be luckier than the major owners of Meralco who get their capital from their customers and then charge them the highest rates?

On top of all these, the Commission on Audit sample audit of Meralco found the power distribution company guilty of overcharging by P8 billion in 2004 and P4 billion in 2006. A complete audit from 2001 to the present should therefore be demanded. This is precisely why Nasecore, in coordination with Jun Simon, filed petitions for the overcharging already identified to be refunded to the public.

Simon started this advocacy after years of my trying to enlighten him on the issue, as well as further education from Mr. Pete Ilagan in the past few months. The joint effort of the two started when Nasecore suddenly lost its five NGO-funded lawyers when the petition against Meralco was about to be filed. Fortunately, Simon found more committed volunteer lawyers who are convinced of the righteousness and absolute victory of this cause.

Even though Simon campaigned for PeNoy and is widely believed to be one of those awaiting government appointments, he says he is just sticking to advocacy work from here on. During our GNN interview, I needled him about the failure of PeNoy’s Sona to raise these issues of the exploitation, profiteering and manipulation of the power oligarchs while clearly and unjustly making Napocor the scapegoat. Simon asked for time for the administration to address the issue.

Though I didn’t want to make Simon any more uncomfortable about it, the failure of PeNoy to call the oligarchs and their rampant and manipulated predatory rate hikes is really a fundamental anti-people and anti-consumer crime.

Giving more time is really just postponing the inevitable: Joining and championing the revolt against the oligarchs.

(Tune in to Sulo ng Pilipino, Monday, Wednesday and Friday, 6 to 7 p.m. on 1098AM; watch Politics Today, Tuesday, 8 to 9 p.m., with replay at 11 p.m. on Destiny Cable Channel 21; visit our new blog, http://newkatipunero.blogspot.com)