Power pirates feeling the heat

DIE HARD III
Herman Tiu Laurel
11/01/2010



The power pirates from government and the private sector are beginning to feel the heat from the people’s rage over their electricity price-gouging. They know that they have already reached the limit of the people’s tolerance of their abuse. The recent notice from the Power Sector Assets and Liabilities Management Corp. (Psalm) of its dropping the P471-billion “universal charge” (UC), consisting of debts and contract cost recoveries of the National Power Corp. (Napocor), is the first sure sign of this.

These so-called “debts” are actually profits that the independent power producers (IPP) raked in from the onerous purchased power agreements (PPA), along with the currency and fuel supply guarantees given out to them by Cory, FVR and Gloria, as well as from the fire sale of low cost Napocor generation assets, such as the privatized hydro and geothermal plants — which could have serviced all the debts and then some if government had retained them.

Of course, we want to bring fair electricity prices to our people that are comparable to other Asian countries, where rates are only one-fourth of what Meralco charges and half of what people in our other provinces pay for. But the universal charge, if imposed, will not only add over one peso more to our already highest power rates in Asia; it will nudge us even closer to the very top worldwide.

The Freedom from Debt Coalition (FDC) has long called for Psalm to drop its bid before the Energy Regulatory Commission (ERC) of laying that P471-billion UC on our backs. It even called on government to conduct a fresh round of review (and renegotiation) of IPP contracts in order for it to rescind the onerous ones. But even as we’re all for FDC’s plea, calling for another review is really redundant and inane.

As the FDC itself is reminded, another government review some years ago already found 35 IPP contracts to be severely disadvantageous to government, which hasn’t been acted upon up to now. The issue therefore isn’t whether these should be reviewed again; but whether Aquino III will act on the conclusions of that first review by renegotiating those PPAs, and sue for damages or compensation for losses incurred by government and power consumers over the decades, including opportunity and interest costs.

The amounts which these IPPs have plundered are so staggering that an honest-to-goodness assessment would compel them to surrender their contracts and return to the state those generating assets, which they got for a song, just to save their necks. But this will require an absolutely heroic political will that is simply not forthcoming from the present dispensation.

All of us should realize that the only source of political will is the same sector that these pirates have apparently been holding by the nose — the people.

Only the power pirates’ fear of a seismic backlash from the people has made them desist (so far) from pushing through with the UC; and only that kind of a backlash to the prevailing set-up of privatized power generation, transmission, and distribution can end the continuing exponential growth of Psalm and the public’s debt.

The idea of floating a “bond” by Psalm, for instance, which is really just issuing new debt papers and creating more utang as government proposed, should be rejected vehemently as it will only worsen the debt problem even more.

The FDC, meanwhile, continues to urge government to “enforce provisions in the IPP contracts” that call for the IPPs to maintain an operational level of readiness at all times in order to prevent unplanned outages that give way to more rate increases at the Wholesale Electricity Spot Market while IPPs that break down still get paid for power that they don’t produce.

One can indeed see the convoluted system, and it’s one that can’t be corrected unless the basic privatized set-up is overturned, i.e. brought back to the system before privatization.

Unfortunately, the present government cannot be expected to even imagine this as it hasn’t shown a heart for real radical change. How can it be in favor of the people when it cannot even temper rate increases in other public services, such as mass transport and toll ways?

Our only recourse then is to go back to the people and help galvanize their raging sentiments into national action.

Last Saturday morning, the anti-ERC, anti-Meralco action alliance held its first consultation. Despite only a day’s notice, a dozen attended; Pete Ilagan of Nasecore and former Mayor Jun Simon said they will attend the next meet. Of significance is the attendance of Kilusang Makabansang Ekonomiya (KME) with Jimmie Regalario and businessman Ricky Angeles. It is a group that represents at least four progressive bishops who I am told also believe in the socialization of the energy sector.

We will be inviting FDC and EmPower for the next meet, as well as others interested to help. (We’ll announce the next venue in our Friday column.)

REMEMBER: Tonight, Monday, Nov. 1, is the start of our “10 Minutes vs Power Pirates” lights out protest that will be held every Monday henceforth, from 7 to 7:10 p.m.

(Tune in to Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; watch “ERC-Meralco Victims: Gising Na!” with FDC, Jimmie Regalario, and Atty. Alan Paguia 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)