Power and nationalism

DIE HARD III

Herman Tiu Laurel

8/24/2012

Last Monday's column zeroed in on the "Meralco 'subsidy' spin." Besides showing that the Manila Electric Co. (Meralco) and, by extension, Philippine power rates are among the top five highest in the world, we were able to point out that this is not due to any government subsidy but because of a number of other reasons.

In fact, if any subsidy were being given, it is the consumers footing the bill--first, by advancing payments each year--for four year regulatory periods--to Meralco and other distribution utilities (DUs); then, via exorbitant Wholesale Electricity Spot Market (WESM) rates for selected independent power producers (IPPs); then, as payments to Meralco based on a 500-percent to 900-percent overprice of transformers, substations, electric poles, and other assets; plus, a P2.2-billion Meralco exaction for "regulatory liaison;" or even the power firm's carry-on of non-power-related real estate and other projects to its asset base; and the up to 17 percent Performance Based Regulation (PBR) scheme that supplanted the fixed 12 percent Return-on-Rate Base (RoRB) formula that was already upheld by the Supreme Court (SC) in 2003.

Jojo Borja of Iligan Light and Power Inc. (ILPI), being a third generation practitioner in the power generation and distribution business, called us to elaborate further on what he sees as the beauty of the RoRB system.

According to him, "there are even more important differences between the RoRB and the PBR aside from the simple of 12 percent versus 17 percent arithmetic. The 12 percent RoRB is a cap and not automatically granted; and DUs sometimes have to wait for up to three years... as the authorities would review every aspect, from exchange rate to cost of fuel and changes in cost of equipment, etc.; what is approved could be a lot lower than 12 percent. The 17 percent PBR is not only a 30 percent higher rate; it is also granted in advance for four years of a regulatory period and automatically every year until the reevaluation four years later (or the only time) when the rates are reviewed."

But here comes the clincher from Borja's own admission: "Despite the RoRB stringency, ILPI made money; but with the PBR, it's always a bonanza."

Butch Junia, the indefatigable investigator of Meralco foibles e-mailed us his additional observations after reading our last column: "Residential (consumers) contribute 71 percent of Meralco total revenue, the balance from non-residential; in other words, we pay double, not just 25 percent more."

He moreover contends that "PBR as implemented… differs from the way it should be implemented (because) the six objectives of PBR, according to Ingo Vogelsang of Boston University, in his paper 'Electricity transmission pricing and performance-based regulation,' are: efficient day-to-day operation; efficient investment; signaling locational advantages; cost recovery; simplicity and transparency; and political feasibility… (the last of which) means no class of customer is materially disadvantaged relative to another…"

Based on the aforementioned, Junia notes that the "PBR here will fall short on the objectives, particularly the last two."

"On the global price," he adds, "Wikipedia electricity pricing shows that the Philippines is fifth highest after Tonga (57 US cents), Denmark (40.38), Germany (36.48), and Brazil (34.18)... (where the) Philippines is at 30.46… but that was as of March 2010. Considering increases since then, and if Meralco's rate is (now) more than P14 per kilowatt-hour (KWh), then we could be the highest at around 58 US cents. But that is the highest residential rate for Meralco customers, not their average. Still, that is what those consuming more than 400 kWh are charged."

So while the rest of the country debates minor or, worse, irrelevant issues, our nation's power patriots are doggedly sticking their magnifying glasses on the fine print of the labyrinthian local and global experience, rules and processes, as well as actual power rates which a host of government bureaucrats are blind to.

Borja, for instance, has brought his Energy Regulatory Commission (ERC) exposés to Malacañang and to Commission on Audit (CoA) commissioner Heidi Mendoza--but to no avail. Yet, in spite of such setbacks, our crusaders continue to plod on.

The same is true for one other power patriot whom we should highlight this day, August 24th. A former SC Chief Justice (CJ) and the current Honorary Chairman of the Kilusan ng Makabansang Ekonomiya (Movement for a Nationalist Economy), former CJ Reynato Puno, whose Supreme Court affirmed in a landmark 2003 ruling the paramount importance of the 12 percent RoRB cap as the true system for basing Philippine power rates, now joins our increasingly growing ranks.

That landmark decision, which also ordered a CoA audit of three sample years of Meralco's books, later found P46-billion disallowances based on our most senior power consumer crusader Mang Naro Lualhati's computation of CoA's findings.

Unfortunately, those actions were insidiously subverted in the ERC boardroom in 2004 when the regulatory body's commissioners created the PBR and distorted the power rate setting mechanism to the great disadvantage of the Filipino people, while ringing the cash registers of Meralco with annual profit increases of close to 100 percent consecutively thereafter.

Justice Puno will be speaking today, 8:00 a.m. to 12 noon, in the KME-sponsored "Chief Justice Reynato Puno Lecture Series on Economic Justice" at the UP Bahay Alumni. He will also join me in my GNN (September 1, Saturday) "Politics Today" show to discuss the situation of economic justice, specifically how the Philippine power rate crisis is suppressing economic development and justice in this country today.

(Watch Talk News TV with HTL, Saturdays, 8 to 9 p.m., with replay at 11:15 p.m. and Sundays, on GNN Destiny Cable Channel 8, this week on "Politicization of the Judiciary" with Alan Paguia; visit http://newkatipunero.blogspot.com)

Privatization Piracy Projects

PEOPLE'S STRUGGLE

Herman Tiu Laurel

8/20-26/2012

"There are those who intend that one day everything will be owned by somebody and we're not just talking goods here. We're talking human rights, human services, essential services for life. Education, public health, social assistance, pensions, housing. We're also talking about the survival of the planet. The areas that we believe must be maintained in the commons or under common control or we will collectively die." - Maude Victoria Barlow, National Chairperson of The Council of Canadians, co-founder of the Blue Planet Project, chair of Washington-based Food and Water Watch, founding member of the San Francisco–based International Forum on Globalization, former Senior Advisor on Water to the 63rd President of the U.N. General Assembly.

PPP schoolhouses – Private Piracy Project
A headline last Aug. 16 trumpeted: "PPP auction successful … for a second public-private partnership (PPP) project has been deemed a success by the government, which yesterday named two groups as the winners of contracts to build classrooms in three Luzon regions…. BF Corp.-Riverbanks Development Corp. and Citicore Investments Holdings, Inc.-Megawide Construction Corp., Inc. had successfully bid for the Public Private Partnership for School Infrastructure Project (PSIP). Build-lease-transfer contracts expected to be soon awarded involve the construction of 9,301 classrooms, with toilets and furniture, …" But, as our source at the very core of Philippine construction industry informs us and cannot be named as he represents one of the major suppliers to the sector, at a very huge cost to the Filipino people and the National Government:

"The PPP schoolhouses will cost P 1.2-M to construct based on the bid submissions of the winning contractors. If the schoolhouses were built by government it would cost P 700,000.00 only per unit of exactly the same design as the PPP proponents. The Filipino-Chinese business community donates similar schoolhouses as part of chambers of commerce outreach and public service programs, and they cost only P 300,000.00 per unit of exactly the same kind of schoolhouse. The National Government and the Filipino taxpayer will be severely burdened in the coming years paying massively over-priced schoolhouses and the private maintenance expenses will be added to this. It's going to be a mess in the coming years as the toilets and furniture breakdown and there will be constant bickering as to who should be responsible. There will be demands for escalation costs due to exchange rate fluctuations, inflation, and like electricity and water rates the schoolhouse maintenance cost will shoot up."

Like Electricity, a swindle of the Century
A new, double-edged blade of a survey from a foreign energy consultant rates Meralco's power rates as the World's "ninth most expensive". The Perth, Australia based International Energy Consultants (IEC) presentation at the Senate's Joint Congressional Power Commission (JCPC) also reported that the Philippines' power rates are still ranked the "highest power rate in Asia". The JCPC is tasked to oversee EPIRA (Electric Power Industry Reform Act) implementation to provide "least cost" power through "competition and efficiency", and chaired by Senator Serge Osmeña (a Lopez oligarchy-family relation and defender of the oligarchy, he chastised the conservative economic think tank FEF, Foundation for Economic Freedom, as "communists" for supporting the review of EPIRA). Filipinos and Mindanaoans, like labor advocate Louie Corrales, accuse Osmeña of stonewalling pro-people reforms in the JCPC.

The IEC survey named Hawaii, Italy, Malta, Japan, Cyprus, Germany, Denmark, Netherlands, Philippines and Singapore as having the highest power costs: "Meralco is comparable with Singapore, Australia, Netherlands and Denmark (the highest in the World - htl) but significantly higher than several other countries within the Asia-Pacific Region ,… In terms of commercial retail tariff, the Philippines ranked sixth among the 44 jurisdictions, with its $0.2043 per kilowatt hour (/kWh), exclusive of value added tax (VAT), 31% above the average among the 44 jurisdictions. The Philippines' $0.1728/kWh industrial retail tariff was also sixth highest and 26% above the average, while its $0.2485/kWh residential retail tariff was 17th highest and 13% above average." Note that Filipino residential consumers are subsidizing the local industrial sector paying 25% higher rates - and subsidizing private power companies who have never fully paid their privatization obligations to this day.

IEC's lead consultant and director John Morris said, "Several neighboring countries … have average tariffs that are much lower than Meralco's…due to … subsidies of up to 50% to consumers… IEC believes that providing subsidies via lower tariffs is bad economic practice and ultimately unsustainable. When subsidies are added back to retail tariffs, the true cost of electricity in these countries rises to a level that is much closer to Meralco's… " (a lie, Meralco rates are high because of massive overpricing of asset base and distorted Performance Base Rate –htl) - If the policy of subsidizing power is so bad why are all the countries Morris cites as practicing this "bad subsidy" all growing far faster economically than the Philippines? Common sense, Mr. Morris?, but I understand that IEC needs to make concessions to continue serving as consultant to many privatization projects.

IEC is no different from ERC and Meralco consultants Emmerton Consulting, SKM and NCL, providing conflicting data and signals to cover their asses while earning huge consultancy fees (as Butch Junia reports, the three costing up to P 500-M a year, charged to us Meralco customers).

Corpo-rats: unaccountable tyrants.
When I use the term corpo-rats it is not about the thousands of legitimate business enterprises that do business fairly and squarely. I refer to the privileged, power leveraged, foreign financed backed oligarchs like the Lopezes, Pangilinans, Cojuangcos et al, who combine and use manipulation of politics, financial maneuvering and corruption. Corpo-rats include the foreign trans-nationals exposed by John Perkins in his book "the Economic Hitman". We all know by now how bribery and IMF-World Bank pressure got the EPIRA passed in Congress in 2001, we all have learned over the years how the U.S. has been pressuring governments to open up their markets through globalization, and today, the complete privatization of public assets. Here're some words of wisdom from linguist, philosopher, social activist Noam Chomsky:

"Privatization does not mean you take a public institution and give it to some nice person. It means you take a public institution and give it to an unaccountable tyranny. Public institutions have many side benefits. For one thing they may purposely run at a loss. They're not out for profit. They may purposely run at a loss because of the side benefits. So, for example if a public steel industry runs at a loss it's providing cheap steel to other industries. Maybe that's a good thing. Public institutions can have a counter cyclic property. So that means that they can maintain employment in periods of recession, which increases demand, which helps you to get out of recession. Private companies can't do that in a recession. Throw out the work force because that's the way you make money."

The tyranny of the corpo-rats is highlighted in the case of Department of Energy chief Rene Almendras who was already announced by Malacañang months ago to be replaced by August 1 with a new face, Emmanuel Bonoan. Two weeks of August have passed and Almendras has not budged from the DoE. Why? If we follow the most crucial issues under the DoE we will see that the largest deal in the offing is the extension of the Malampaya natural gas contract which will negate the Philippine's 100% control over the multi-billion facility when the contract is supposed to expire in 2024. Shell and Chevron-Texaco want to abort this transfer of the assets to the Filipino people, and the man they trust to consummate it is Almendras; now not even Malacañang can make its decision to replace Almendras stick. In many aspects of our economy this is the helpless situation our government finds itself in. It is the same in the power industry where all sectors of the people now reject the EPIRA but cannot do anything about it.

Philippines must fight back
The privatization programs will go on endlessly until the Filipino as a nation and as a people have nothing left and all is under the control of a few oligarchs to drain the economy (as it was in Russia under Yeltsin) or until we as a people and led by an intelligent middle-class stand our ground and start fighting back. Many other countries shave done this, from Iceland which is now putting some of its parasitic bankers in prison for collaborating in privatizing state banks and swindling Iceland's savings depositors, to Venezuela, Bolivia, Ecuador and many OTher Latin American countries who are taking back what is properly for the "commons" such as oil and other Mineral wealth, as well as power and water utilities, i.e. what is best shared amongst the people and the nation. This is the People's Struggle.

(Watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m. and Sunday, this week: "Politicization of the Judiciary" with Attys. Bono Adaza and Alan Paguia; visit http://newkatipunero.blogspot.com)

Meralco's 'subsidy' spin

DIE HARD III

Herman Tiu Laurel

8/20/2012

A new survey from a foreign energy consultant ranks Meralco's power rates as the World's "ninth most expensive". The Perth, Australia based International Energy Consultants (IEC) presentation at the Senate's Joint Congressional Power Commission (JCPC) also reported that the Philippines' power rates are still ranked the "highest power rate in Asia". The JCPC is tasked to oversee EPIRA (Electric Power Industry Reform Act) implementation to provide "least cost" power through "competition and efficiency", and chaired by Senator Serge Osmeña (who chastised the conservative economic think tank FEF, Foundation for Economic Freedom, as "communists" for supporting the review of EPIRA). Many Filipinos and Mindanaoans aware of or adept in the power sector issues, like labor advocate Louie Corrales or Mr. Jojo Borja of Iligan Light and Power (ILPI) or consumer advocates Butch Junia or Mang Naro Lualhati, believe Osmeña stonewalls real reforms.

The IEC named Hawaii, Italy, Malta, Japan, Cyprus, Germany, Denmark, Netherlands, Philippines and Singapore as having the highest power rates : "Meralco is comparable with Singapore, Australia, Netherlands and Denmark (the highest in the World - htl) but significantly higher than several other countries within the Asia-Pacific Region ,… In terms of commercial retail tariff, the Philippines ranked sixth among the 44 jurisdictions, with its $0.2043 per kilowatt hour (/kWh), exclusive of value added tax (VAT), 31% above the average among the 44 jurisdictions. The Philippines' $0.1728/kWh industrial retail tariff was also sixth highest and 26% above the average, while its $0.2485/kWh residential retail tariff was 17th highest and 13% above average." Note that Filipino residential consumers are subsidizing the local industrial sector paying 25% higher rates - and subsidizing private power companies who have never fully paid their privatization obligations to this day.

IEC's consultant John Morris said, "Several neighboring countries … have average tariffs that are much lower than Meralco's…due to … subsidies of up to 50% to consumers… IEC believes that providing subsidies via lower tariffs is bad economic practice and ultimately unsustainable. When subsidies are added back to retail tariffs, the true cost of electricity in these countries rises to a level that is much closer to Meralco's… " Mr. Morris' opinion attempts to justify Meralco's high rates, blame it on "subsidy" but on this he provides no basis for the claim. If the policy of subsidizing power is "bad economic practice and ultimately unsustainable" then why are all the Asian countries Morris cites as practicing this "bad subsidy" all growing far faster economically and their people live better lives than the Philippines? Likewise, government subsidy to a country's power sector in its various methods of generation is the predominant practice in the World. This is obvious when considering mega-projects like hydro-electric or nuclear energy project all over the World only governments can undertake.

IEC was also the consultant the Philippine chamber of Commerce and Industry (PCCI) quoted in its February 2011 meeting and reported in the media, the same report TUCP cited to back up its direct and written appeal to President Noynoy Aquino to act on bringing down power costs in the country which it said is causing investors to turn away and jobs lost. Many Filipino power consumer advocates have been reporting this fact even before IEC came out with its survey in October or 2010; but there is a new twist to its presentation of its survey adding its opinion on the matter of subsidies to the power sector that those who understand the power industry in the Philippines immediately recognize as blatant lies: 1) that Philippine and Meralco power rates are among the highest because of subsidy from government and 2) subsidy for electricity is bad of an economy.

Let us state it clearly and emphatically here, there is no government subsidy in the Philippines for its power sector. If any subsidy is being provided it is the power consumers providing it – advancing payments each year for four year regulatory periods to Meralco and other Distribution Utilities (DUs); WESM (Wholesale Electricity Spot Market) exorbitant premium rates for power purchases from selected IPPs (Independent Power Producers); consumers' payments to Meralco rates based on 500% to 900% overprice of transformers, sub-stations, electric poles and other assets, proven by Jojo Borja's documented testimonies; consumer payments to Meralco for the "regulatory liaison" amounting to P 2.2-B which Butch Junia exposes; the carry-on of Meralco non-power related assets such as the Rockwell real estate projects; the up to 17% Performance Based Rate (PBR) that ERC replaced the 12% RORB rate affirmed by the Supreme Court in 2003.

Filipino power consumers are also paying for the subsidies for the "Lifeline Rate" to those consuming below 99kWh/month, the "senior citizens" discount and the SPUG (Small Power Utilities Group) or the financially unviable electrification of rural communities. Government is not paying for any subsidy. Don't be fooled by the use of the term subsidy by Mr. Morris, Serge Osmeña and others like them. They make everyone assume "subsidy" is always from government and "freebee" to people. In the Philippines' privatized power, water and toll ways it is always the consumers and commuters who are paying the subsidy to privatized public enterprises – socialism and "freebees" for the capitalists from the people's capital. IEC is playing an insidious role, as foreign consultants of ERC and Meralco like Emmerton Consulting, SKM and NCL – obfuscating data and signals, mixing half truths, to cover their own asses while taking in huge consultancy fees and giving the ERC, Meralco, the privateers the smokescreen to arbitrarily "true up" or "fudge" information and manipulate the industry sector.

(Watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m. and Sunday, this week: "Politicization of the Judiciary" with Attys. Bono Adaza and Alan Paguia; visit http://newkatipunero.blogspot.com)

Floods: Yellow legacy

DIE HARD III

Herman Tiu Laurel

8/17/2012

The Fourth Yellow government now under BS Aquino III (the first three being under Cory, FVR and Gloria) is pointing to every Juan, Pedro and Maria to blame for the floods.

If we were to listen to Department of Interior and Local Government (DILG) Secretary Jesse Robredo, then it's 100,000 of them, mainly slum folk of Metro Manila, who constitute up to 60 percent of the metropolis' population today. That's easier said than done; not just in the matter of funding for their relocation.
The problem lies in the fact that the cheap labor for the service and industrial sectors of the economy concentrated in Metro Manila comes from the slum-dwellers. Who pick up the thousands of tons of garbage, for example? Who are the waiters in the restaurants; the kargadors in the markets; or the janitors in the supermarkets? But wait: They're not all there is to the slums, as a multitude of the metro's police force also live there. Thus, a major economic dislocation would be in the offing with this knee-jerk reaction of the fourth Yellow government.

The relocation of at least half-a-million impoverished Filipinos from the slums of the metropolis to even worse living conditions for lack of jobs is not necessarily an unwelcome thought for all. If I were with the New People's Army (NPA) and the Communist Party of the Philippines (CPP), probably the only viable force for the poor to hit back at a system that has been so cruel to them, I would quietly watch and not oppose this proposal to "ethnically cleanse" the homeless poor from Metro Manila.

The forced mass migration will count among the largest in human history, one that even Moses probably would not have imagined; and there would be no promised land for such a massive body of humanity taken away from their jobs.
For once, the "reaffirmists" of the CPP-NDF should cozy up to the "rejectionists" of Etta Rosales, Riza Hontiveros, Ronald Llamas, et.al and murmur into their ears, "That's the right thing to do."

The CPP-NDF can finally find a new base, not conforming to Mao's theory — but a base nevertheless — for recruiting and arming freshly angered dissident forces within striking distance of the center of power in this country.

I read one news report quoting Dennis Murphy, whom I got to know as a young activist under Fr. Jose Blanco, lamenting the fact that the poor are always blamed for the floods. Of course, I would also raise the question as to why they are poor and why there are so many of them when the economy is supposedly growing each year and even hitting 6.4 percent in the first quarter of the current one.
This space is too limited to list all the news of the supposed growth or of the astounding corporate profit spikes but I can list a few here: "Energy unit lifts SMC profits …posted a more than 50-percent rise in second quarter net income, driven by earnings from its energy businesses"; "EDC nets P5.7 billion in first half … Lopez-led Energy Development Corp. (EDC) … driven by electricity sales from subsidiaries First Gen Hydro Power Corp. and Green Core Geothermal Inc., which jumped 32 percent to P15 billion from P11.4 billion a year ago."
Whereas we used to get low cost power decades ago, these companies are now components of the highest power cost in Asia inflicted on the Philippine economy, which has resulted in our ever-growing poverty.

The perennial flood crisis facing the entire Filipino nation (not just Metro Manila) is a legacy of the historic counter-revolution in political and economic democracy that was in its nascent stage in the early 1980s and aborted by the Yellow elite-led and US-backed "color revolution."
Whatever the anti-Marcos Yellow forces say against Marcos, it cannot be disputed that his government was already making headway in its housing for the slums and job generation through intermediate industrialization, as well as the launching of the OCW (Overseas Contract Workers) deployment program.

The tenement housing programs in conjunction with the Pag-ibig Fund and other housing financing saw its birth under Marcos. The housing programs since Cory Aquino has been but a shadow of many a derelict Pag-ibig tenement projects.
It's pretty much the same experience the nation has had with the grand and far-seeing flood control programs of Marcos that has seen Cory and the Yellows all but throw these into the untended sewer systems of the country.

The perennial flood disasters will never be solved under the Yellows because they have not a single ideological framework for building the nation. What they do have in their minds is the continuing coddling of the local oligarchy and its foreign overlords; the continuing emaciation of the national economy by accumulating monopoly of its wealth and patrimony; the constant and systematic campaign to push back the Philippines into deeper and deeper social, economic, political, and moral regression until it is completely prostrate before the new, insidious total re-domination of the entire country; and a people completely defenseless and vulnerable to a final dissolution of their nation-state.

Come to think of it, the floods are the least of the disasters that have come from the Yellows. Their ultimate legacy to the future of this nation is the destruction of the nation's hopes — its last vestige of humanity.

(Watch Talk News TV with HTL, Saturdays, 8 to 9 p.m., with replay at 11:15 p.m. and Sundays, on GNN Destiny Cable Channel 8, this week on "Mines: Theirs or Ours?;" visit http://newkatipunan.blogspot.com)

CCT for disaster infrastructure

DIE HARD III

Herman Tiu Laurel

8/13/2012

What the country could build now is a floating grandstand. Then it will be very convenient for BS Aquino III, the other politicians, the DSWD and DILG secretary, the disaster officials, do-goody media networks, ad nausea to perform their center-staging for the national audience. This should be very welcome next year as it is election campaign year. There must be a special rotating stage for BS Aquino and his Cabinet to announce new flood control projects, such as the headline today trumpeting a P352-billion 20-year flood control project. That announcement is clearly intended to cover BS Aquino III's criminally insane move to cancel crucial flood control project such as the Laguna Lake dredging that could have started two years ago and may have mitigated the floods this year. He could also have taken the initiative in reviving the Parañaque floodway project on the plans decades ago but no, he just blabbered on about "tuwid na daan."

To start spending on flood control projects now is just catch up, which speaks of the absolute lack of strategic sense of BS Aquino III and his entire team when they sat down to govern the country two years ago. Without such strategic vision how come they now have this sudden visionary project that will span 20 years or so envisioning such a grand and majestic flood control project costing such as impressive amount. The P352-billion project cost is just a headline and easy announce but what are the details? I can't imagine the Department of Public Works and Highways (DPWH) suddenly conceptualizing and drawing up such a comprehensive plan that would take over 20 years to accomplish — drawn up in the span of a week at the height of the current flood crisis! It is more likely that this headline was frantically designed by Malacañang to parry the growing backlash to its dereliction the past two years of its duty to prepare the nation for these floods. From this perspective, even the aborted chopper flight of BSA III seems like a gimmick.

If the Noynoying administration had more imagination and initiative it could have done a few things early on, like combining its infamously notorious unproductive doleout conditional cash transfer (CCT) program with a work agenda related to flood control project all over the country. A flood control directed work-for-cash program engaged in cleaning up waterways, sewing water floatation jacket stuffed with trashed styrofoam packaging, cleaning sewerage systems, helping dredge canals and clearing Laguna de Bay of water lilies and silt, elevating the levees alongside Marikina, Pasig and other rivers. The CCT beneficiaries could also be engaged in building rafts for flood emergencies by assembling empty oil drums into small floating platforms for flood prone barangays where they reside. The projects could include making tools and equipment from simple auto-jack powered lifting devices, fashioning emergency stretchers, makeshift tents for earthquake crises.

We could think of many more productive projects where the CCT could be used, such as cottage industries making fiberglass safety helmets that can be distributed to schools and public offices for earthquake emergencies. I will bet that the readers of this column can come up with labor intensive projects that can channel the CCT into productive enterprises that can also help provide the basic supplies and equipment for disaster preparedness. Right there in the CCT budget is P35 billion that could already jump start for all types of disaster preparedness. When we give it some thought we see that so much can be done with the budgets already allocated today. In fact, it would be productive and fun to invite readers to send in their ideas on how else the P35-billion CCT can be used productively to provide cash for work that will help in disaster mitigation, flood control and other public effort. We don't need rocket scientists in the Cabinet or the DPWH, just sincere and creative men and women.

A few more ideas: Since the CCT is supposed to be directed toward the welfare of the poor, the urban homeless squatting in the flood stricken areas we see today can be prioritized. They can be assisted with self-help projects to raise their homes on stilts, and we would have new Badjao type homes on stilts that could help resident weather the weeklong floods, and provide a new tourist spot for people to marvel at. If we use the CCT budget every year toward constructing components of those plans of the DPWH engineers for solving the perennial and aggravating flood perils we'd have that P350 billion spent and invested in flood and other disaster mitigation project within 10 years. We don't need to wait until 2035 as the DPWH announced to complete the programs. In only 10 years it would all be done, without allocating additional budgets and employing hundreds of thousands gainfully and taking home enough pay to enroll their children in school and provide sufficient nutrition for the family.

With P35-billion CCT dedicated to creating jobs in flood and disaster preparedness, or other concrete and productive projects all over the country, the environmental and safety awareness level of our people will rise — this pedagogical impact would be incalculable. No doubt, with that kind of budget and the fulfillment generated by the productive income the working poor would certainly gladly donate more floating grandstand every year for the eager do-gooders in society.

(TNT with HTL, Saturdays 8 to 9 p.m., with replay at 11 p.m. and Sundays, on GNN, Destiny Cable Channel 8, this week: "Mines: Theirs or Ours?"; visit http://newkatipunero.blogspot.com)

August scourge: Floods and...

DIE HARD III

Herman Tiu Laurel

8/10/2012

The rains, floods and landslides have been the scourge of our lives for two weeks now, but the sun will shine again even after the low pressure areas and Typhoon "Saola" shall have passed as did "Ondoy" and "Sendong" in years past. The damage estimates will be in the hundreds of millions or a few billions of pesos; and the nation's life will move on.

But there is a scourge that has stayed with us for over 10 years now like a permanent devastating storm staying steady upon this land. Wreaking havoc year in and year out, the pestilence of oppressively exorbitant power costs that continue to rise unabated, despite all the reasons for these to naturally come down, has inflicted hundreds of billions of economic losses each year.

The rains and flooding of our country's hydroelectric dams should have naturally lowered power rates as nature's way of compensating for the damage of the floods — but no, in this August rainy season, our power rates will still go up!

A headline just three days ago ("Meralco rates to rise in August") carried dominant power firm Manila Electric Co. (Meralco)'s announcement that "the increase in the generation charge this month was the result of the eight-day shutdown of the Malampaya gas pipeline, which affected one-third of the total power supply in Luzon in July." But what's the real score?

Currently minority stockholders of Meralco, the Lopezes locked in Meralco's power supply to power plants they own even after selling the company's lion's share to the other oligarchs, to ensure that they would continue to enjoy the fruits of the sweetheart deal they dealt for themselves.

Meralco admitted that "it sourced 45.6 percent of its requirements from three independent power producers (IPPs) — the Sta. Rita and San Lorenzo gas plants (both Lopez-owned) and the Quezon Power Philippines Ltd. — which increased their rates by a combined 48 centavos per kilowatt-hour (kWh) to P5.58 per kWh," which was why "without the gas from the Malampaya… the Lopez Group's First Gas resorted to the use of more expensive liquid condensate fuel to ensure a continued generation supply to Meralco."

Now why wasn't Meralco made to shift primarily to cheap hydroelectric power? The first typhoons this year entered the Philippines in June and the dams were already filled.

In that same report, Meralco admitted that state-owned National Power Corp. (Napocor), from which it gets 41.7 percent of its supply, had reduced its power sold to Meralco by P0.66 per kWh; and yet the private power company said it "failed to offset the increases in the Wesm (Wholesale Electricity Spot Market) and IPP charges." Now how on earth would a reduction of P0.66 per kWh fail to offset the P0.48 per kWh increase by the Lopez gas-powered IPPs? Here's why: Meralco said it sourced 12.6 percent of its supply from Wesm at a cost of P14.70 per kWh. Isn't the Wesm supposed to help promote competitiveness and lower prices? Instead, it always contributes to increasing the prices because its "market operations" ensure the IPPs' windfall.

A Wesm Web site explains, "The Wesm is designed to encourage competition in generation while at the same time providing incentives for the effective operation and development of the transmission networks, coupled with locational price signals to encourage the economically correct geographic placement of any future planned generation," obviously using language designed for arbitrary interpretations and selective allocation. Thus, in the past years Wesm prices have gone up to P60 per kWh as it did sometime in 2008 or 2009 when government attempted (through the spot market) to recover its losses from Gloria Arroyo's favors to the power oligarchs. Since the Wesm share in the total price would only be around 10 percent, it will simply go unnoticed if media do not report on it. But as the public has now wised up, people like us now monitor it. However, for the most part, there are a number of media outlets that the oligarchs still completely control to hoodwink the innocents.

Like other social networks, one news Web site raps for the power oligarchs. Our student volunteer, Richard, sent us two disinformation pieces on the power issue from Rappler. The first was a few weeks ago when it featured a very expensive animation on the high power rates, which blamed everything on Napocor, while totally omitting any mention of Meralco; the power oligarchs' corruption of Congress to pass the Electric Power Industry Reform Act (Epira); the illegal change from the 12-percent Return-on-Rate Base to the 17-percent Performance Based Regulation formula of computing power rates; the 500 percent to 900 percent overprice in the assets of Meralco; the manipulations in the Wesm; or the overpricing of Malampaya gas for power, ad nausea. The second is an interview with Energy Secretary Rene Almendras, painting him as a "straight shooter" who is into "depoliticizing energy" while staying completely silent on the nationwide protests against his subservience to the power oligarchs or of Mindanao's total rejection of his actuations in the region's 1st quarter 2012 power crisis.
Energy Chief Rene Almendras was supposed to have been replaced by Aug. 1, but he seems to be staying longer while undergoing an image remake. Why? Our Energy Department insiders say Almendras and Cailao still have to sell off (or privatize) the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) and Malampaya's remaining 14-year contract to Shell-Texaco; likewise the privatization of four power barges; as well as the Agus-Pulangi hydroelectric complex in Mindanao (deemed imperative by Osmeña and company)

Malacañang seems powerless against these masters of Almendras. They must be more powerful than the rains or typhoons that have passed.

(Watch Talk News TV with HTL, Saturdays, 8 to 9 p.m., with replay at 11:15 p.m. and Sundays, on GNN Destiny Cable Channel 8, this week on "Power Consumer Struggle Updates" with Jojo Borja, Butch Junia and lawyer Luke Espiritu; visit http://newkatipunero.blogspot.com)

Arthur vs St. Heidi

DIE HARD III

Herman Tiu Laurel

8/6/2012

I wrote column entitled "A Trojan Horse" in the Feb. 7, 2011 the Tribune describing what I saw as the insertion of a virus in the Commission on Audit (CoA) intended for political demolition jobs, done by the lobbyists of the Yellow cabal.

When CoA Commissioner Heid Mendoza testified before the Senate impeachment court that Chief Justice Renato Corona had $28 million in his FCDU (foreign currency deposit) account by totaling transactions of several years as if it were one sum, every Filipino should have realized that they were looking at that virus of an accountant and auditor that the "civil society" or the Yellows canonized. It had to take Ombudsman Conchita Carpio-Morales to restore some credibility to the government's "hidden" dollar account of Corona in admitting that the total deposit was only $2 million is the whopper of an arithmetic of Heidi Mendoza is discounted.

If the whopper of a story of Heidi Mendoza at the Senate impeachment hearings is not enough to convince some Saint Heidi Mendoza worshippers (as there are still a few I encounter who wonder why anyone should doubt her sainthood as the Ateneo School of Government, the Inquirer and the Philippine Star, and ABS-CBN had already anointed her) then they should get to know Arthur Benasa, a 40-year veteran of CoA and retired the past 10 years from the institution he had devoted a lifetime serving.

Mr. Benasa, an impecunious 71 year old, had gotten in touch with me through Linggoy Alcuaz whom he sought out in mid-2011 in a media Kapihan to present his case against the sainthood of Heidi Mendoza. I noted Mr. Benasa's arguments at that time but never had an opportunity to take up his cause after I had written my piece on the matter and moved on to the many other issues that confront the public constantly.

With the recent controversy over the revival of certain settled issues affecting the City of Makati by none other that Saint Heidi Mendoza, I was reminded of Mr. Benasa's criticisms of Saint Heidi Mendoza. It was fortunate I had his cell phone number still and called to invite him to discuss his issues on our Global News Network (GNN) cable TV program. Before finally agreeing to join my show Benasa called to clarify a few things: first, what is my take on the Reproductive Health (RH) bill. This was, of course, not relevant but given the venerable status of the man I believed I understood. I said that I'm against the RH bill for reasons not similar to the Catholic Church's arguments, Benasa felt at ease as he wanted assurance that we are like minded, as he is firmly against the RH bill. Then he explained the next condition for joining the show, "no politics" as he didn't want to "dilute his pure intentions." I assured him that we were likely like-minded in pursuing truth about the real Heidi Mendoza.

I jokingly added that maybe we are alike in that we both have little money, and he laughed and felt comfortable enough to admit that he needed taxi fare to be sure to make it to the station on time. I figured the distance from Sucat to Makati and back would require about P500 and sent this to his bank account. He arrived that afternoon at the studio ahead of me, with a folder of documents he was all prepared to discuss in detail. On the show the first thing I asked was why he was so incensed with Heidi Mendoza as to go to all this trouble crusading in media for and meeting journalists like me to tell his story. He explained that when he heard Heidi Mendoza lie and malign the CoA as an institution and literally everyone with it as corrupt, and the consequence of that slander which he heard and read from the news that the public had taken to stoning CoA shuttle buses: That was the tipping point.

Mr. Benasa declared outright that Heidi Mendoza lied through her teeth in her testimonies to the Senate in the Gen. Garcia plea bargain hearings when she claimed under oath: 1) she headed a special six-member team the CoA to investigate Garcia's transactions; she was only a member of the team and never a team leader (though she tried to arrogate this unto her self); 2) that she submitted an official audit report; as a mere member she could not singularly submit a report; 3) she said the chairman, commissioners and directors did not support her when she was provided a vehicle, office and more than P200,000 as a member of the team to conduct the audit (which she refused to be audited on claiming it was confidential), and Benasa claims he had evidence to show this money was also spent in bars; and due to all these she inflicted to much damage on the CoA as an institution and the countless personalities quietly serving to the best of their capabilities.

In the latter part of the interview Benasa added another important item, the claim of Heidi Mendoza that $5,000 of a UN fund to the PNP was missing, and the UN headquarters had to call Manila to belie that claim and state that there was not such missing fund. Benasa ended with an ominous caution to the government on Heidi Mendoza saying, "You know the illusion of grandeur of this may not be controlled… and illusion is always without limit."

(TNT with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., and Sun 8am on GNN, Destiny Cable Channel 8: this week ""True up or throw up" power rates; visit http://newkatipunero.blogspot.com)