DOE, ERC, IPPs: "Damn public hearings"

DIE HARD III
Herman Tiu Laurel
7/13/2007



In “The Real Plunder” column Wednesday, the third paragraph had a critical typo error. It should read “In 2004 Napocor proposed the P 1.22/kwh increase on the basis of its claims of losses due to debts and other factors, Nasecore petitioned the ERC to deny it; but Albano’s ERC invariably takes the side of rate increases.” Some readers texted us the erratum and we thank them for this; the entire column really was making that point – that Nasecore has consistently defended the welfare and interest of the Filipino power consumer. We continue today with the last, critical issue on this:

Last June 23 news items appeared in various dailies reporting that the Department of Energy (DOE) promulgated or formally proposed changes to the Implementing Rules and Regulations (IRR) of the EPIRA (electric Power Industry Reform Act). In that twisted power sector law there was one item that retained a semblance of concern and protection for the public interest and welfare, Rule 3 Section 4e of the IRR that requires public hearings with the Energy Regulatory Commission (ERC) whenever the power generating companies sought a rate increase for “cost recovery”.

DOE’s Raphael Lotilla wants to do away with that requirement for public justification from power companies before being granted an increase. But what is so wrong with the requirement for public hearing that the DOE has to seek its amendment? Isn’t such public hearings part of the standard government regulatory tradition and practice as both fundamental right of the public to be heard and due process in matters affecting them, particularly in public services rates and charges? That’s what we’ve all, always been made to believe.

Atty. Alan Paguia concurs: “All rate fixing agencies such as the Energy Regulatory Commission would be required by their charter to ensure due process and the public’s right to be heard on such public interest matters”. But ERC chief Rodolfo Albano Jr. supports the DOE to do away with public hearings saying “…if all 140 power distributors in the country applied for adjustment of their generation rates every month, the ERC would be swamped with 1,680 applications and 1,680 hearings in various localities in a year.” What, then, will ERC do – count electric posts all day?

What Raphael Lotilla and Rodolfo Albano want is reprehensible: to allow power companies to raise rates costs automatically and arbitrarily! Only later will they then be “subject to verification and monitoring of the Energy Regulatory Commission”; the power companies will already be collecting unverified claims for “cost recovery” amounting to billions of pesos every month, which happens regularly as the ERC’s Albano said in the statement above, and more months may pass before verification is done. That’s giving the vampires the key to the blood bank!

Given Albano record there’ll be no hurry to verify any “cost recovery” claim of power companies – in fact, unless consumer protection groups like the Nasecor, the FDC or my group Sulô, takes action Albano may not take action for months or maybe never take action. The power companies would be richer by billions upon billions from utterly fictitious claims that they already frequently do even when public hearings are required. Remember the infamous Rex Tantiongco and his approval of “provisional increase” of Meralco’s rate in 1994?

The Tantiongco 18.4 centavos Meralco “provisional increase” resulted in over P 30-B illegal collections. Audits made by the Commission On Audit and finally used by the upright ERC head Neptali Franco in 1998 to order a refund. The case stretched more years while the Lopezes reaped the financial interests and opportunity costs from the tens of billions of illegal collections they made; up to this day no one is certain has been fully refunded. I once saw Tantiongco jogging in my neighborhood, with rather expensive protection - two bodyguards.

What is Tantiongco afraid of? Consumers? Why? Does it reflect guilt and paranoia? Was it all worth it, Mr. Tantiongco, when your children and grandchildren read tons of other articles cursing you written over the past years? Lotilla and Albano want to follow the same path with their worse proposal, not just “provisional” but “automatic” cost recover (a.k.a. rate increase, please keep this synonym in mind always). Just thinking about Lotilla and Albano’s proposal forms in my mind a visual image of an “automatic” pistol to put to their heads.

Meralco’s legend as bilker of the consumer’s billions grows, now with the “time of use” gimmick which Enron used to swindle $ 50-B from California (and landed Enron chief Ken Lay in jail and in a coffin). To avail of the “time of use” Meralco will charge P 8,000.00 for a new meter – but what happened to our deposit for our old meter and installations? By Kit Tatad accounting that money may already amount to P 50-B in Meralco’s bank account and earning more billions in interest, so why charge us again? Alas! There’s no end to it.

The radios are talking: Gloria Arroyo is demanding Joe de Venecia give Mikey Arroyo the House Energy Committee - it’s the most lucrative committee – for support in the speakership fight. Meanwhile, the DOE, ERC and power companies are preparing for more power lunder. Indeed, while these leeches cling to power we have no hope. Out with Gloria now!

(Tune in to 1098AM, M-W-F, 6-7pm)