New Year, old fight

DIE HARD III
Herman Tiu Laurel
1/9/2012



I got this text from Butch Junia last Jan. 5 on the rate reset application of the Manila Electric Co. (Meralco) before the Energy Regulatory Commission (ERC): “The first hearing on… ERC case 2011-088 is set on 16 January at 2pm. This is the first hearing on merits after ERC granted provisional authority in Oct. 2011, to take effect July 1, 2012. The rate granted is P1.58/kWh BUT consumers led by Naro Lualhati say it’s only P0.90/kWh. ERC up to now has not addressed consumer opposition. Let us build awareness/interest/involvement of the public. Also work up media coverage. Can we also solicit help/appearance of Alan and Bono? Thank u.”

Not even a week of the New Year has passed and our consumer crusaders are back on the ball again, raring to engage the “enemies of the people” in the continuing war to bring public interest and consumer welfare back to the top of the nation’s priorities. It will be a daunting task for sure, as we need to overcome the oligarchy and mainstream media’s mass mind manipulation with “red herring” issues such as that “Little Girl” and Corona.

Still, we have to doggedly go at it, lest Meralco has another year of bonanzas courtesy of the “provisional authority” granted to it by the ERC. We must remember that this provisional authority is granted even before issues meant to protect consumers are threshed out, which means that these are almost never resolved. And in the few times that they are, such as in the P30-billion Meralco refund case won by consumers in 2003, almost a decade passes and still the money owed by Meralco doesn’t get to be entirely paid. Worse, there is even an allegation that the power giant actually gets money for these payments from its hapless customers--an issue that remains unresolved to this day.

To refresh our memories, Mang Naro Lualhati had already questioned in 2010 the ERC-approved Performance Based Regulation (PBR) rate-setting scheme due to the fact that “overstated annual capital requirements” actually become the basis for massively distorted rate translations, which, in turn, discriminate against residential consumers who have to pay as high as P4/kWh (in distribution rates) while overwhelmingly favoring industrial/commercial users who only pay as low as P0.30/kWh--this, as the ERC-approved rate of over 15 percent is far beyond the legal reasonable 12-percent limit set by the Electric Power industry Reform Act (Epira), among other issues.

Jojo Borja, part owner of power company, Iligan Light, and now recognized as an “oppositor” by the ERC, has also charged Meralco with overpricing many components of its service--from its transformers and electric poles priced five times higher to its substation installations with an even higher overprice--facts that the foreign consultants of the ERC and Meralco had even admitted to.

And, as we transition from the old to the New Year, let us examine the many economic year-enders that have attempted to trace our economic problems. I included Ben Diokno’s “2012 will be better but…,” “Economic lessons from 2011” by Sonny Africa, “Riding out the turbulence” (Malaya editorial), Raul Fabella’s “Elite capture,” and many others. Yet none (except my own in various publications) has ever mentioned “the highest power cost in Asia” as a major root of our country’s economic problems.

I don’t know if they are actually being deliberate in missing this, but industry leaders, from the Philippine Chamber of Commerce to the Confederation of Philippine Exporters and the Employers Confederation of the Philippines, to name a few indicative groups, have already identified the exorbitant power rates in the country as the major hindrance to encouraging investments and, hence, industry and employment.

Tragically, BS Aquino III has not made a single quip on this problem in the past 20 months, preferring to make a mountain out of an alleged P14-million condo unit of Corona instead of the P14-billion annual larceny in the power distribution sector and hundreds of billions in the other power units (such as the National Grid Corp. of the Philippines, which owes government $4-billion in payments for the transmission grid that was earning government P18 billion annually before), compelling the Power Sector Assets and Liabilities Management Corp. to borrow and burden taxpayers with P85 billion more in loans for 2012, after getting P75 billion in 2011.

The current year will usher in more “magic” for the power sector as four Napocor (National Power Corp.) power barges (101 to 104) are set to be privatized while a power shortage is created in Mindanao (see Jan. 5 headline “Rotating outages to hit south-central Mindanao”). At the blink of an eye, these four power barges sold off to oligarchs are sure to suddenly come on line at the opportune time. But wait. There is another momentous event coming in the power sector that we should brace for.

Little noticed was the recent creation of a new agency, the “institutionalization of an independent market operator (IMO) that shall oversee the Wholesale Electricity Spot Market (Wesm)… (assuming) vast powers in the approval of market rule changes and in the appointment of board memberships.” What we are about to see is a concentration of power over policies and prices in a body that the public has no control over, which is likely beyond what the Epira had ever envisioned.

The members to the five-man IMO are required not to have any relations with any member of the Wesm, or the private power companies, at least two years prior; but that’s a joke since even today many Cabinet officials have conflicts-of-interest with their former (and prospective) corporate employers.

What we need is a body with members who are unquestionably on the side of the consumers and taxpayers--something that we will never see under the present dispensation.

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