Automatic "cost recovery": P 1/kwh increase

DIE HARD III
Herman Tiu Laurel
7/20/2007



Just a month after the removal of the public hearings required by the EPIRA Implementing Rules and Regulations by the Department of Energy and the Energy Regulatory Commission, with Meralco and a handful of power distributor-independent power producer combines, Meralco has exercised its power to “automatically” raise its rate under the pretext of “cost recovery” by P 1/kwh. From P 4.69/kwh to P 5.67/kwh or a full 25% increase and adding P 27-B a month to the coffers of the Lopez mega-crocodile Meralco – a quarter of a trillion a year more charges without benefit of a public hearing.

Resigned energy secretary Lotilla said, “I would like to end my vow of poverty”, so where does he get his money for expensive antique cartographs for his hobby? That’s the height of hypocrisy for his knows that the rewards there are sky high, and with the favor he did to Meralco and other IPPs he’s assured of a gilded future. All DOE chiefs that promoted privatization from Viray to Lotilla are rewarded beyond the wildest dream of most Philippine government bureaucrats. Likewise, the ERC appointees that do favors for Meralco, like the infamous “provisional authority” pioneer Rex Tantiongco.

With Lotilla, incumbent ERC chair Albano gave Meralco and other power generating-distribution companies their manna from the heaven. Albano argued that the ERC would have to hear 1,600 petitions for “cost recovery” if the power utility companies were not given “automatic” privilege to recover the costs they claimed. Nasecor’s Pete Ilagan belies Albano’s claim because he asserts, “There are only seven companies engage in both generation and distribution that the ERC has to deal with and not hundred as Albano claims.”

Albano and Lotilla argued that they pity the power utility companies because of the burden of their unrecovered costs that have to wait for months to be heard and approved by the ERC; but they don’t or can’t and won’t pity the millions of power utility consumers many of whom have to scrimp on breakfast or on their children’s “baon” for school just to “advance” the “cost recovery” payment of Meralco and its ilk. A quarter of a trillion pesos will be sucked out of the millions of Meralco and other IPPs electricity consumers – imagine what contraction of the retail economy that will create.

Senator Koko Pimentel (because he is the real 12th place senator) joined me at my table at the Club Filipino as I was writing this piece. He arrived to join the Binay “convention” of the anti-Gloria political groups, as well as meet his lawyers preparing for the Electorial Tribunal protests of Zubiri’s procalamation. When Koko heard my explanation he was shocked and kept repeating, “Are you sure its P 1/kwh? That’s why the Meralco stocks shot up astronomically! The stock market players knew this ‘automatic cost recovery’ was going to kick in!”

Senator Koko added, “This ‘automatic cost recovery’ is a post-audit system that spawns corruption. Checking for anomalies only after the disbursement. Charge the consumer first before public hearing and examination of the cost claims!” Consumers are put in an impossible situation now with Lotilla and Albano’s grant to the vampires the key to the blood bank and the blood donors’ clinic, and we can audit only after they’ve withdrawn the blood and the blood donors are dead from the bloodletting. Why is it only Nasecore and this column raising this rage to high heavens?

Pete Ilagan and I had briefed the only sitting senator that will definitely take action on this matter: Senator Trillanes. We cannot pre-empt the senator’s legislative strategy that has been explained and is absolutely satisfactory. Of course, no legislation will be effective is the chief culprit is there on top of the executive branch of government to appoint the equally corrupt, pro-Big Business and anti-consumers like Lotilla (now replaced by the job-hopping master of nothing Angelo Reyes) and Albano conniving with Meralco and company.

As we write this our volunteer monitoring the radio airwaves reported Meralco spokesman Elpi Cuna’s claim that Meralco will get only 13 to 15 centavos of the P 1/kwh. The truth is the Lopezes will get at least 70% of the “cost recovery” of up to .70 centavos because they own the Independent Power Producers Meralco gets the bulk of its power from and where Meralco is also part owner. Elpi Cuna has made it his livelihood to lie for the Lopezes and hoodwink the people – but there’s going to be a day of reckoning for all of these.

While here at the UNO-GO “convention” I wondered if these “oppositionists” will bring up real policy issues as this “automatic cost recovery” promulgated by the DOE and ERC. Will Chiz Escudero bring it up? Impossible. He has a radio program on the Lopez owned DZMM. Do you think he can speak out against this travesty of due process for the electricity consumers? What about Alan Cayetano? His late father became senator as the compañero on DZMM. Does Cayetano dare challenge their family benefactor?

Senator Jinggoy Estrada filed a bill to junk EPIRA, he should revive it and maybe can beat Villar and Roxas to the 2010 presidential run. The party that removes Gloria and Meralco’s plunder will be the next government. Can GO-UNO go in this direction?

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