Tuesday, July 19, 2011

Meralco unstoppable, ERC infallible

CROSSINGS
Butch Junia
7/18-24/2011



The Energy Regulatory Commission (ERC) last month granted or approved Meralco’s Maximum Average Price (MAP) of P1.5828 per kilowatt hour for distribution, supply and metering (DSM) charges, to take effect July 2011.

Meralco’s DSM rate today is P1.6464 pkwh, granted by ERC for Regulatory Year (RY) 2011 (June 2010-July 2011).

It is a rate that consumers led by Mang Naro Lualhati say should only be P0.90 pkwh.

Meralco’s application in June 2010, approved exactly a year later, was for a rate increase to P1.7056 pkwh for RY 2012. This was ERC Case No. 2010-069RC.

Still, consumers led by Mang Naro say that rate should only be P0.90 pkwh.

P20-B Overcharge
When ERC announced last month its order granting Meralco’s latest overstated rate, ERC made much of the point that the rate they approved at P1.5828 pkwh was lower than the current rate of P1.6464 pkwh.

Mang Naro was not impressed – P1.5828 pkwh is still P0.6828 pkwh over the true rate, which he said was P0.90 pkwh. With Meralco’s annual sales of 30 Billion kwh, that would be an overcharge of over P20 Billion.

The ERC’s latest rate award to Meralco is also being challenged by other consumers like Pete Ilagan of the National Association of Electricity Consumers for Reforms or Nasecore.

They insist that ERC’s approval of Meralco’s Annual Revenue Requirement (ARR) was hasty, irregular, arbitrary and contrary to law and jurisprudence.

The ARR is the projected expense budget of Meralco that is now the basis for the rate that Meralco will charge us for the next four years, from July 2011 to June 2015.

ERC on Other Side
Last June 28, Meralco filed its application for approval of its MAP for RY 2012 and the translation of that MAP into a distribution rate structure for its various customer classes. This was docketed as ERC Case No. 2011-088RC, a new case.

As expected this drew loud protests from those who insist that there are many unresolved issues in the ARR application, ERC Case No. 2010-069RC.

Arguments and objections ranged from the legal, technical, policy, mathematical, etc.

Being familiar with the issues, I know the oppositors have the law, jurisprudence, logic, equity, fairness on their side.

Unfortunately, ERC is on the other side.

Reviewing the whole process that has been laid out by ERC under its so-called internationally-accepted rate-setting methodology – the PBR or Performance Based Regulation – consumers do not stand a chance, at all.

Draft Determination
I will just cite a few choice quotes from some of the PBR documents, and leave the rest to your curious minds.

On December 15, 2010, in the “Review of Operating and Maintenance Expenditure (OPEX) Forecast: Third Regulatory Period” prepared by ERC’s Regulatory Operations Service, the ROS said: “In this review, the ROS has relied on the accuracy of the information provided to the ERC by MERALCO.

“While during the clarificatory meeting process, ROS queried on information provided in the revenue application that appeared to be inconsistent or inaccurate, ROS did not undertake an audit or attempt to verify the information on which it based itsrecommendations. ROS, therefore, cannot be held responsible for any conclusions based on misleading or inaccurate information provided.”

Also on December 15, 2010, in the “DRAFT DETERMINATION” on ERC Case No. 2010-069RC, signed by Chairman Zenaida Cruz-Ducut, Commissioners Alejandro Barin, Jose Reyes and Maria Teresa Castaneda, the ERC said in Item 1.3.2: “The Draft Determination is not a final resolution of MERALCO’s applications. Xxx Moreover, the Draft Determination does not have any impact or bearing on MERALCO’s current distribution wheeling charges or will not be used to set future distribution wheeling charges.”

Final Determination
On June 6, 2011, in Page 6 of the FINAL DETERMINATION signed by Chairman Cruz-Ducut and Commissioners Barin, Reyes, Castaneda and Rauf Tan, the ERC said: “The Final Determination is the final resolution of MERALCO’s application. It presents the ERC’s final decision on the price control arrangements that will apply to MERALCO for the Third Regulatory Period and will form the basis on which MERALCO will prepare and submit its distribution rate applications for the Third Regulatory Period. Xxx These rate structures are to be filed with the ERC by June 13, 2011. Xxx The implementation of the new rate structures for the July 2011 billing period is the scheduled start of the Third Regulatory Period (July 1, 2011)…..”

On December 8, 2008, Res. No. 20, S. 2008 was adopted unanimously by Chairman Cruz-Ducut and Commissioners Barin, Reyes, Castaneda and Tan, Modifying the “Rules for Setting Distribution Wheeling Rates for Privately Owned Distribution Utilities Entering Performance Based Regulation (RDWR), with Article VII on the Regulatory Reset Process, providing in Item 7.2.4, as follows: “At these hearings the ERC will have the opportunity to question the Regulated Entity on its proposed distribution tariffs and parties of record to the rate case will have the opportunity to cross-examine witnesses put forward by the Regulated Entity to defend its application.”

There is, however, a limitation to this cross-examination stated in Footnote 21 to this rule, to wit: “Note that the questions and cross-examination will only be allowed on aspects relevant to the rate application and not on earlier regulatory decisions or the basis on which these were made. For example, cross-examination on aspects decided by the ERC in its final determination on the price control arrangements for the relevant Regulatory Period will not be accepted at the hearings.”

Beyond Challenge
A Commission that started the rate process disavowing responsibility for its conclusions, virtually railroads the filing of the rate translation, eventually ends up elevating itself to an absurd level of infallibility, placing its determinations, no matter how infirm, beyond challenge on cross-examination.

Incredibly, ERC in PBR wants us to dissociate the so-called rate translation from ERC’s Rate Determinations which are the bases of that translation, especially when ERC has yet to resolve questions and issues raised by consumers on many major aspects of those Determinations.

This ERC PBR boggles the mind and beggars the poor.

If we did not have Mang Naro and Pete, we would already have drowned in all the oxymorons and non-sequiturs ERC has been spewing out lately.

And, we would have lost our shirts in the bargain, too.

Time we did something about our power rates, which is among the highest in the world.

Together with Dave Diwa, who has made his mark in consumer advocacies, we will organize – walk the talk – for Meralco customers.

Monday, July 18, 2011

The parasitic elite's victims

CONSUMERS DEMAND!
Herman Tiu Laurel
7/18-24/2011

 

Even though the thought of it isn’t new, reports such as the one filed last July 13 by Emmie Abadilla of the Manila Bulletin entitled, “Local telecom interconnection rates highest in the Asia-Pacific region,” only serve to remind us all of the extent of the abuse that we as consumers suffer on a regular basis.  That story provided us with data on how Philippine cellphone rates are at the top in the region, “averaging at $0.10, versus its neighbors who charge from $0.03 to $0.05.”  Translated, it means we’re paying around P4.30 for every interconnection from competing telecoms providers compared to, say, our neighboring Malaysia or Thailand, which only charge P1.34 to P2.20 for the same service.  And that means ours is double or even triple their cost!
 

Unfortunately, this pattern is the same in many other privatized utility services in the Philippines--be it in electricity, water, port handling, or even toll ways.  Of course, many Filipinos are by now aware that the price or rate-gouging in public utilities is not only limited to electricity ever since the era of privatization began.
 

Many of the owners of such privatized utilities are, in fact, interconnected or interlocked at the level of the Board of Directors and stockholders.  Meralco is the prime example of this: Practically all the major oligarchs-slash-corporations today are feasting on the company’s highest power rates in Asia.  These are so high that even congressional data showing us having the second highest industrial/commercial rates next to Singapore simply fall short of the truth as the greater bulk of Meralco’s revenues comes from residential consumers, who pay for rates that are up to 20 times higher than that of the industrial/commercial sector--and yes, higher still than Singapore’s.
 

It is indeed a feeding frenzy for this pod of killer whales gorging on everything the public vitally needs for a decent, modern, and productive life.  Increasing the cost of these basic utilities has undoubtedly begun to shrink the Filipino middle class and consign much of 65 percent of our urban poor to a life reminiscent of the “Stone Age.”
 

Government institutions, I would like to believe, do try to restrain the greed of these oligarchs and mega-corporations, as the evidence shows with regard to the National Telecommunications Commission (NTC)’s attempt to bring down Philippine interconnection rates from P4.20 to P1 and text messaging charges from the current P0.35 to a more reasonable P0.15. This has forced some telecom companies to make their own proposals for a graduated decrease in their rates. Still, the NTC should force an immediate cut as these firms have long been feasting on the highest telecom rates in the Asia-Pacific for the past two decades.
 

Globe, for one, proposed a one-year grace period before reducing its text interconnection charges.  But doesn’t that just translate to more needless billions, which texting consumers would have to pay for?
 

With the many rate increases the BSA III government is waiting to spring on the public--from MRT/LRT fares, to the Performance Based Regulation (PBR) rates in electricity, plus the Universal Charge that PSALM is itching to add to the mix--the burden on consumers will become even more unbearable.
 

When one observes how the privatization of utilities evolved in the Philippines, the pattern of consolidation of elite control of such assets--through political and financial chicanery; deception by trickery or sophistry; or both--was all brought down upon the consuming public after Edsa I, or the so-called Yellow “democratization” of the country.
 

Instead, what we had was the unending vilification of the State, where government institutions, as well as nationally-owned assets, were vigorously demonized and associated with the alleged excesses of former President Marcos and his cronies, despite the fact that the privatization frenzy that came after his fall had actually expanded the base of Edsa I cronies, chief of which are the old oligarchy--the Ayalas and Lopezes--as well as new globalist partners such as the Salim and Suharto groups of Indonesia and the transnational energy firm, Mirant.
 

All told, these oligarchs only gained new power over the State by capturing it and, with bribery of the corrupt political class, consisting of such well-entrenched families as the Cojuangcos, Lopezes, Macapagals, Roxases et al., through “elected” puppets such as FVR, Gloria, and now BSA III, drew up anti-people programs and policies such as the IPPs, EPIRA, and now BSA III’s Public-Private Partnerships.
 

The ongoing political, including judicial and financial, trickery and sophistry permeate the whole of our system today not just in privatized public utilities. In one of the largest economic sectors of our society, the ruling elite has just pulled off one of the greatest swindles in our history--the transfer of P70 billion of one portion of the Coconut Levy shares in San Miguel Corp. to Eduardo “Danding” Cojuangco.  Imagine: Twenty-five million coconut industry dependents were sacrificed to satisfy just one man!
 

The whole system, from the legal practitioners, such as ACCRALaw, to the politicians it sprang like Enrile, Angara, Drilon, the late Raul Roco et al., to the entire judicial system, as well as the mainstream media, all collaborated to consummate this giant scam.
 

Another example is the Hacienda Luisita case, where the same ruling elite, with its politicians and lawyers, and the judicial system subverted the original stipulations of the government loans to the other Cojuangco clan for obtaining the said property, which involved the eventual transfer of the actual land to the farmers--not so-called “shares” of stocks.
 

This leads me to a quote I have repeatedly paraphrased for readers to instill this lesson of history: Arnold J. Toynbee in A Study of History wrote that “the cause of the fall of a civilization occurred when a cultural elite became a parasitic elite, leading to the rise of internal… proletariats” or the people alienated from the fruits of the economy.
 

The earlier the Filipino people and consumers, particularly the middle class, learn that they can no longer trust the ruling elite, the earlier they will be ready for meaningful change.  All our present rulers are simply parasites; we need a new “savior” to gather our growing popular rage into an organized movement.
 

We, the non-elite and non-oligarchs, are all victims of the parasitic elite.  It is time that we launch the final campaigns to pull down these parasites from their perches of power so that they will be finally crushed beneath our feet.
 

(Tune in to Radyo OpinYon, Monday to Friday, 5 to 6 p.m., and Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; Talk News TV with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, on “Franchising: Hope for Economic Recovery”; visit http://newkatipunero.blogspot.com for our articles plus select radio and GNN shows)

Oust all... make heads roll

DIE HARD III
Herman Tiu Laurel
7/18/2011



Col. Generoso Mariano, deputy commander of the Naval Reserve Command, declared that the Aquino government “has no capability to save us from hunger and death.”  In that Facebook video dated July 3 he argued, “We soldiers also feel the impact of (the) unrelenting rise in prices of commodities, medicines and food… If this government has no intention or is not doing anything to save the life of the majority, it is the right of every Filipino, including soldiers, to replace the government.  I repeat, replace the government.”  He then exhorted everyone to “once and for all build a nation based on truth for without it there can be no justice, and without justice… no peace and without peace… no development.”  The video, by the way, was posted by a group called “Oust Noynoy Movement!”

While Col. Mariano’s plaints are obvious, his timing leaves some questions: Why only now?  Why not during Gloria Arroyo’s time which was as bad?  And why replace only the government when the whole system is at fault?

Vice Adm. Alexander Pama said Col. Mariano is currently under investigation and confined to headquarters.  Pama must have some inkling of Mariano’s reasons as I am told he, too, was supposed to have joined Gen. Danilo Lim’s military protest in 2006.

Most of you may know that I have supported such military actions in the past--from the Bagong Katipunero’s (or the Magdalo’s) to Gen. Danny Lim’s--because I know of RP’s systemic socio-economic injustice brought about by oligarchic exploitation as well as neocolonial enslavement, which have exacerbated poverty and decay with no resolution at hand.

These ills that demand real solutions are not being addressed at all with the seriousness required, even a year after the present administration has stepped in.  Only palliatives and PR stunts in the form of Conditional Cash Transfers or Public-Private Partnerships are the order of the day while Filipinos continue to be on “Debt Row,” with their basic necessities progressively priced beyond reach--and this, as government is mired in squabbles and ineptitude, apparently oblivious to the erosion of its moral claims by its own KKKs.

Our military friends had already expected Col. Mariano’s move two weeks before it came out.  I was also informed that Mariano, a reserve officer (not a PMAer), had joined the 1989 RAM (Reform the Armed Forces Movement) coup attempt but has since been uninvolved.  When his Marine colleagues such as Gen. Miranda and Cols. De Leon and Segumalian protested in 2006, for instance, he was not among those who were hauled off to detention.

Some speculate that, with his retirement coming up a week after his video came out, among Mariano’s other motives was possibly a missed chance to make the rank of general.  True or not, such timing certainly can’t compare with the incontrovertible sacrifices of the young Bagong Katipunero officers who staked their careers or Gen. Danny Lim who was in line for promotion when he took action.

Having considered all the information, I can say that Col. Mariano’s act still helps the cause of change by calling attention to the crisis in Philippine society and its political-economic morass.  One major shortcoming of Mariano’s declaration, though, is his limiting the blame to the present government--a half-truth that has opened him to be rightly or wrongly interpreted as part of the ploy of the (still) “worst enemy of the Filipino people today,” who has all the reason to create distractions and destabilizations to deflect from the growing crisis she faces.  And this is what other factions of the military are now saying about him.

From my perspective--coming from one who’s rabidly against both the present government and Gloria Arroyo’s forces--Col. Mariano could have been more credible if he had made his analysis comprehensive enough to cover the ills of the entire system, calling for the “ouster of all.”

The present ruling system and the people behind it--or the ruling class, which includes the financial, economic, military, political, and “civil society” elite--thrive on the betrayal of the sovereignty of the people.  They subvert the nation’s sovereignty and economic aspirations by collaborating with foreign interests to perpetuate debt-dependence; the institutionalization of alternating corrupt regimes through coups disguised as “People Power” and rigged elections (Hocus-PCOS); the systematic dismantling of the State through liberalization and privatization; and the consequent elimination of “public welfare,” “public service,” and “national interest,” in favor of “profit” and “corporate welfare.”  Such outcomes are what Mariano described in common-tao terms as the “hunger and death,” which ordinary soldiers also feel.

But shouldn’t he stop to think: Who are behind the present government he despises?  Weren’t the Ayalas, Lopezes, Cojuangcos, the Makati Business Club, the newer oligarchs, “civil society” and its NGOs, the clergy, as well as the US and Britain, along with their respective chambers of commerce, behind Arroyo for as long as they were able to exact their pound of flesh from us?  And aren’t they now behind the present dispensation and massively profiting from us as well?

The Col. Marianos, the Bagong Katipuneros and Para sa Bayan soldiers of the Armed Forces of the Philippines, and all the impoverished people of this nation should see through the ruling elite’s games, particularly the Noynoy vs. Gloria moro-moro.  In the spirit of Bonifacio’s Revolution, let’s all unite and oust them all--and make their heads roll!

(Tune in to Radyo OpinYon, Monday to Friday, 5 to 6 p.m., and Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 to 7 p.m. on 1098AM; Talk News TV with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, on “Franchising: Hope for Economic Recovery”; visit http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com for our articles plus TV and radio archives)