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)
