EPIRA after 10 Years: A tin cup for Mang Naro

Butch Junia
6/13-19/2011


Where the 25^th and 50^th years are traditionally marked by silver and gold, the 10^th anniversary is celebrated with tin and aluminum, symbolizing the flexibility and durability that allows a relationship to be bent and stretched, without actually breaking.

On June 8, 2011, we marked and mourned the 10^th year since signing into law RA 9136, The Electric Power Industry Reform Act of 2001 or EPIRA. It was passed by the 11^th Congress under Senate President Aquilino Pimentel, Jr. and House Speaker Feliciano Belmonte, Jr., the latter again holding the House helm of this 15^th Congress.

It was the last major legislation passed by a lame duck Congress already voted out of office in May that year, but the first signed into law by newly-installed President Gloria Macapagal Arroyo.

A Hotly-contested Issue
At the time of its passage, and even as far back as the two earlier Congresses, power reform was a hotly-contested issue. Doubts were raised that it would result in lower rates. There were strong reservations that it could curtail utility abuse and excessive profits. But the reform bill was passed, anyway, and we got stuck in all its landmines and trap doors these past 10 years.

That the consumers weathered the years without their backs breaking while their wallets were ripped and savaged, is testimonial to their tenacity and “carabao patience”, not to the utilities’ generosity or the regulator’s prudence.

Herman “Ka Mentong” Laurel, our columnist in OpinYon  and GNN Talk TV host, reminded us that he and his comrades even filed a court case against the passage of the so-called reform law, but I understand it was lost at one of the courts in Pasig.

With the benefit of 10 years’ worth of painful hindsight, we now know that we have been paying very dearly for Ka Mentong’s loss.

Transparent and Reasonable?
Notable objectives of EPIRA are as follows: “to ensure transparent and reasonable prices of electricity ... to protect the public interest as it is affected by the rates and services of electric utilities ... to establish a strong and purely independent regulatory body and system to ensure consumer protection....”

If we are to judge EPIRA against these objectives, would there be doubt in the verdict?

Bayan Secretary General Renato Reyes Jr., says the law is a failure, as the people are now “worse off than they were 10 years ago.”

Rates have doubled from P4.87 pkwh in 2001 to P10.35 pkwh today.

Public power debt through National Power Corp. (NPC) has remained at US$15.8 Billion, despite the payment of US$18 Billion over 10 years. NPC incurred new debts amounting US$12 Billion during the same period, he said.

Days of Darkness
EPIRA, Bayan said, merely legitimized the PPA or Purchased Power Adjustment that was the bane of consumers in the aftermath of former President Cory Aquino’s days of darkness.

The former secretary general of Freedom from Debt Coalition, Wilson Fortaleza, minced no words, either, in slamming EPIRA. It did not bring in new capacity, he said. Nor did it solve the State’s debt woes from power borrowings, he added.

He also scored the government’s privatization program for generation and other power assets, particularly the Agus-Pulangi hydropower complex in Mindanao.

But the most scathing indictment of EPIRA was to come from those who have been at the forefront in opposing at the Energy Regulatory Commission (ERC) the rate hikes, new charges, altered rate formulas, creative billings, and so-called modern rate setting methodologies that only led to the gouging of captive customers.

Floodgates Opened
EPIRA, according to Mang Naro Lualhati, opened the floodgates to all kinds of fees and charges and regulatory changes that have sent consumers’ heads dizzy and spinning from all the jargon and the technical gobbledygook.

But once you cut it down to its intended effects, the electricity rates have increased three-fold, profitability of utilities have doubled year-on-year over the past three years.

The government has practically surrendered to foreign consultants its regulatory duties under this so-called reform law.


True Power Reform
Ironically, he said, ERC has not acted with dispatch and finality on the many issues he has raised against Meralco, especially the overcharges in capital expense, discriminatory pricing, overcharge in return on assets or rate base, and the illegality of Performance Based Regulation or PBR.

Today, after 10 years of EPIRA, Mang Naro and his fellow warriors for true power reform, tin cup in hand, must still go around begging for justice from ERC, the attention of Congress, perhaps an ear of the President, the help of civic minded lawyers and accountants, the succor of the Energy Secretary, and the wrath of an awakened and agitated consumer.

(Next issue, the flaws and loopholes of EPIRA that have led to the second-highest power rate in Asia, and the failures of ERC as a regulator.)