Ten minutes vs power plunder

DIE HARD III
Herman Tiu Laurel
10/29/2010



Our last column outlined the “power plunder” being inflicted on the people by the collusion between Manila Electric Co. (Meralco) and the Energy Regulatory Commission (ERC), as well as by the Power Sector Assets and Liabilities Management Corp. and the National Grid Corp. of the Philippines, with Therma Marine Inc. of the Aboitiz group.

All told, their profits increased between 60 and 100 percent in the span of just one year, and they were able to manipulate the rate-setting mechanisms to escalate the cost of our energy use by up to 300 percent!

A few days after the said column came out, yet another confirmation of this profiteering was headlined by BusinessWorld: “Meralco powers past Petron in BW’s Top 1,000.”

Meralco came up with a “red herring” to mitigate any adverse reaction to the No. 1 ranking by saying that this came despite “a 2.8-percent drop in gross revenues to P183.7 billion due to reduced generation and transmission charges last year.”

In truth, generation and transmission charges had nothing to do with Meralco’s net income jumping midway this year by 82.3 percent (from P3.15 billion from the same period last year to P5.8 billion so far), as well as with the company’s 2009 P7.7 billion net income surpassing its target of P11 billion for 2010. In fact, Meralco had been raking in this doubling of profits since 2008 when its net income jumped from P3.5 billion to P7.7 billion in 2009.

All through these periods, there was not any real increase in the size and volume of the market. Meralco has taken great pains to hide this with its so-called statistics of 11 to 17 percent growth in the volume of its sales.

What has actually happened was that the massive increases came as a result of the shift from the old Return-on-Rate Base (RoRB) to the new Performance-Based Rate (PBR) setting mechanism that increased allowable returns from the previous 12 percent to the current 15.8 percent!

On top of this, we are faced with the massive overcharging of electricity consumers. The Commission on Audit has already found that Meralco overcharged us by at least P7 billion in 2004 and 2007 alone, which indicates the strong likelihood that the same has happened for the intervening years and beyond.

In fact, an 81-year-old veteran of the Lawyers Against Monopolies (LAMP), Genaro Lualhati, who has fought against this overcharging and won for us 4 million Meralco consumers P28 billion in refunds, filed another petition in 2008 for the power firm to refund another P35 billion worth of overcharges in the past 10 years.

But even as the ERC is obliged by law to resolve the issue within 30 days, it took the regulatory body three long years to issue a decision, and only after Lualhati pressed further. It was revealed in our GNN program by Mang Naro, as Lualhati is called, that the ERC deliberately dilly-dallied and dwelt on irrelevant issues, only to declare his petition “moot and academic.”

Not be deterred, Mang Naro’s one demand is for the other crusaders in this fight to be active again. With Mang Naro on my show was Butch Junia, who came out of retirement for this fight, as well as Pete Ilagan of Nasecore, former QC Mayor Jun Simon, Jojo Borja of Mindanao and many others.

Volunteer lawyers have since been recruited to take all these issues to court so that someday we may finally see ERC pay for its betrayal of public trust.

Butch Junia updated us on the comparative electricity rates of different countries, such as Tokyo’s $0.20/kWh compared to Meralco’s $0.23/kWh, making the Philippines the highest in Asia in terms of power cost today.

Our rates are simply astronomical compared to Jakarta’s $0.06/kWh; Kuala Lumpur’s $0.06/kWh; Paris’ $0.11/kWh; Shanghai’s $0.07/kWh; and even Singapore’s $0.21/kWh.

Few places, in fact, can beat Meralco’s rate; with the only possible exception being New York’s $0.29/kWh — but then, how can you compare the two?

Worse, the situation of Meralco’s 4 million electricity consumers is further aggravated by the formula where regular consumers pay up to P3/kWh in distribution cost while the very large consumers, such as malls and big industries, pay only as low as P0.28/kWh.

As the public is made aware of these facts, the momentum for the consumer campaign is sure to grow.

Action plans have been drawn up, with a “soft launch” on Nov. 1 of the “lights out protest.” The plan calls on all Meralco consumers to turn off their lights from 7 to 7:10 p.m. every Monday.

As people are made aware, then the number of “lights out” days will be increased, helping consumers save money while at the same time synergizing neighborhoods toward the cause. This action has been done before but this new initiative shows the growing support for the struggle. All sectors should thus “volt-in” for a nuclear chain reaction.

Media workers can help in the information campaign; even the UP Law Department can help while businessmen can donate stickers, tarps, and posters to spread the word.

Remember: Lights out every Monday 7 to 7:10 p.m. Let’s knock the lights out of those power plunderers!

(Tune in to Sulo ng Pilipino, Monday, Wednesday and Friday, 6 to 7 p.m. on 1098AM; watch “Electrocuting Power Consumers: The ERC-Meralco Collusion, Part II” with former mayor Jun Simon, Pete Ilagan, et. al on Politics Today with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on Global News Network, Destiny Cable Channel 21; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)