Informed Consumer Consent

CROSSINGS
Butch Junia
1/17-23/2011



Payag ka ba na ikaw ang mag-bayad ng Senior Citizen Discount sa kuryente? Tinanong ka ba tungkol dito? Kung tatanungin ka, papayag ka ba?

The Energy Regulatory Commission (ERC) recently announced the Senior Citizen Discount for electricity, to the applause of a lady senator and a congressman and to the elation of many seniors like me.

Was this for real, this time? Or was it more of the old stuff?

I checked the ERC website for the implementing rules and regulations and after going through the definition of terms and the mathematical formula for the discount, the provision I was looking for leapt out of the page: “The Subsidizing End-User.”

There it was. It was not a free lunch, after all. Consumers would have to foot the bill; more of the old ERC stuff.

According to the ERC IRR, the subsidizing end-user “shall refer to the non-senior citizen and non-qualified senior citizen end-users who shall bear the discounts and adjustments extended to qualified senior citizen end-users. All lifeline customers are excluded from the subsidizing end-user base.”

In other words, all the non-qualified customers, except lifeline customers or those consuming less than 100 kwh per month, shall pay for the discounts. That will include every Juan and Juana connected to any distribution utility, including even those seniors whose account is not in their name or do not bother to apply for the discount at all.

In the Meralco franchise area, hardest hit would be the residential customers using more than 400 kwh per month who are already paying more than double the rates of others. Under the ERC order granting Meralco a P0.1547 pkwh increase in its distribution rates from P1.4917 pkwh to P1.6464 pkwh, average, residential customers with over 400 kwh consumption are charged P2.3943 pwkh for distribution, while those in the range of 101 kwh to 200 kwh are charged only P0.93 pkwh. General power customers served by 34.5 kv and 115 kv lines are charged only P0.0282 pkwh.

This grossly unfair and very lop-sided rate structure was challenged by Mang Naro Lualhati who says residential customers were overcharged P39 Billion under these discriminatory rates. According to Mang Naro, he is still waiting for the final ruling of ERC, but he is prepared to elevate his action to the appellate court.

In any case, we are already paying a lifeline rate subsidy that ranges from P0.10 pkwh to P0.14 pkwh and a cross subsidy charge of P0.0103 pkwh. Check out your monthly bills, and depending on your actual consumption, you could be paying as much as P100.00 a month on subsidies.

The power reform law mandated the lifeline rates without specifying where the subsidy will come from. This was used as a sweetener to cushion the impact of reforms, and was dressed up as part of the safety nets.

Ironically, it violated one of the principal objectives of electricity reform and restructuring – the removal of subsidies. So now, not only have the cross and lifeline subsidies been expanded, ERC has hit consumers with yet another subsidy for seniors.

And as with the other subsidies, this will be implemented without those “who shall bear (i.e. pay) the discounts” even knowing that they are the patsies.


Kaya ang tanong po namin sa mga mag-babayad, alam ba ninyo na kayo ang taya dito?

If you say yes, I commend your generosity. If not, let us work to set things right for the consumers. Generosity is a virtue, provided you are not shanghaied into it.

The discount guidelines are in the ERC website. Check them out yourselves.

Take note of the implementation and monitoring scheme, where the utility can charge the subsidy to us without need for prior ERC clearance. Reports are filed at the end of each month but ERC verification is not until after three years. The ERC record for giving consumers access to reports from utilities is not inspiring, thus there is every reason to fret over the kind of latitude apparently granted to utilities in this case.

Bear in mind that while an individual customer may only be charged P10.00, but with 4.5 million customers, that is P45 Million for just one billing cycle. With sales of 30 billion kwh, that is P300 Million for every one centavo charged.

The usual defenders. Some of the usual talking heads of Meralco have come out of the woodwork to defend the utility’s P45Billion capital investment program and sell the so-called improvement in service quality and reliability as justification for Meralco’s soaring profitability. An increase in profits from P2.8 Billion to P12 Billion in just three years, without making any sizable new investment (each cost item in the capital expense program of Meralco is covered by the annual rate increase ERC grants Meralco under Performance Based Regulation) is hardly the reasonable return contemplated under EPIRA. As to the quality of service, that is the obligation of Meralco under its mega-franchise, and if it should fall short of those quality standards, instead of rewarding Meralco with a rate increase, the franchise should be given to someone else. Come to think of it, we have yet to see a tangible advantage – like economies of scale – from giving such a huge franchise to just one service provider.

Email comments, concerns and suggestions to crsng_47@hotmail.com