Salamat po

CROSSINGS
Butch Junia
8/1-7/2011



The President must have been misinformed when he unconditionally commended Congress for extending the lifeline rate in electricity and extending the Joint Congressional Power Commission. In his second SONA delivered exactly a week ago, President Aquino said: “I thank Congress for passing laws regarding… Lifeline Electricity Rate Extension, Joint Congressional Power Commission Extension...”

Socialized Pricing
The two are sound concepts, the first being a safety net for those in real need and the latter being the oversight of a reform law in obvious need of oversight, as current experience has abundantly shown.

Via the Lifeline Rate Discount, households whose monthly consumption is 100 kwh or less get the discount, from 30% for those in the range of 70 to 100 kwh, to 100% for those 50 kwh and below.

Sec. 72 of the Electric Power Industry Reform Act provides: “A socialized pricing mechanism called a lifeline rate for the marginalized end-users shall be set by the ERC… for a period of ten years, unless extended by law...”

While the law did not clearly say how Government will implement that pricing mechanism, the ERC proceeded to charge the cost of that subsidy to households using 101 kwh and more per month, creating a cross-subsidy. In effect, you and I and your Uncle pay for that subsidy for which the President commended Congress.

Pagtutuwid
It can be validly argued that the President merely extended an ongoing program, one that has, in fact, ran the full course of 10 years. But since we are in the pagtutuwid mode, why could he not straighten this out for the Subsidizing Consumers by shifting the subsidy burden to Government, which should have been the case, in the first place.

The Government, too, should be forthright and forthcoming in informing consumers using more than 100kwh a month that they are paying for this subsidy.

Neither Congress nor the Palace was clear about who was footing the bill on this lifeline.

Only very few, those with gold in their deep pockets and in their hearts, endorsed the idea of consumers subsidizing the Government’s safety net even after being told that they were paying for it.

It can be just a few centavos or a handful of pesos, but when you take it with the rest of the other distortions in the power rates, you realize that this where you must draw the line.

It Does Count
I compared Meralco billings of a 156 kwh and a 829 kwh household for the period 25 June to 25 July, each paying P1,607.50 and P9,800.75, respectively. For convenience, let us designate them Household or HH A and HH B.

For that billing period, the Lifeline Rate was P0.1173 pkwh, presumably based on the subsidies paid for qualified beneficiaries, which cost was divided or shared among the so-called Subsidizing Consumers, meaning you and I and your Uncle.

Bear in mind that if Meralco’s monthly sales is 2.4 billion kwh, one centavo per kilowatt hour is P24 million thus the total subsidy we paid for that month was P281.52 million.

In the bills that I have, HH A paid a Lifeline Subsidy of P18.30 for the month, half the price of a kilo of rice under this Administration.

HH B paid P97.24, which would have bought a goto special with egg, okoy and soda, and some change, at the Goto King in the Landmark Food Court at Trinoma.

It does count for something, even with inflation.

COA Must Step In
Meralco has 4.4 million customers. If 400,000 HHs qualify for the subsidy, then the rest of them, the 4 million customers, pay subsidy anywhere between P18.00 to P97.00 or more, per month. Meralco pays itself the cost of electricity it supplies to Lifeline households from the Lifeline subsidy it charges us, at the behest of the Energy Regulatory Commission (ERC).

By the way, in the interest of transparency, ERC should post at its website and publish in a newspaper of general circulation Meralco’s periodic (monthly) liquidation of the subsidy – HHs served, meter read of those HHs, kwh paid, subsidy charged, total amount collected, etc.

ERC should give a full accounting of the subsidy they have authorized Meralco to collect and administer.

As public funds, the Commission on Audit should be asked to step in and check this account, though I doubt this, ERC having excluded COA from the rate-setting process, preferring instead their highly-paid foreign consultants.

But I digress, and will save that for another Crossing.

Stark Injustice
It is high time you look closely at your monthly bill. Check the reverse side.

Under Government taxes, our sample HH A paid P156.70 while HH B paid P989.80.

Government could very well have paid the subsidy from these taxes. But Government would rather keep its cake, eat it, and have your neighbor eat your cake, too.

Worst, the subsidy we paid was taxed 12% VAT as part of “Distribution Rev & Subs” listed under Government Taxes - an unjust tax on an involuntary subsidy.

If the President was fully apprised of this injustice, I have no doubt he would have rectified it, for the millions of Subsidizing Consumers who also are his Bosses.

Salamat po.