11/03/2011
Last week, when Malacañang
was queried about the growing clamor for the country’s Chief Executive
to finally act on the scourge that is the Philippines’ “highest power
rates in Asia,” all the Palace mouthpiece could give was a one-liner
that reeks of evasiveness and buck-passing.
Reacting to the call
from the Philippine Chamber of Commerce and Industry (PCCI), its allied
business organizations, and moderate labor groups, the Trade Union
Congress of the Philippines (TUCP) and the Associated Labor Union (ALU),
deputy presidential spokesperson Abigail Valte minced no words in
saying, “Those concerns should be addressed to the ERC (Energy
Regulatory Commission).”
This is the classic runaround that we,
the people — from the most militant leftists and most democratic
populists (like me), to the most moderate labor unions and working
capitalists — have been subjected to under the decade-old Electric Power
Industry Reform Act (Epira) that brought forth this massive power price
gouging now besetting the land as a waking nightmare.
For one, it
isn’t true that the power service sector or industry is the sole turf
of the ERC. Even the very flawed Epira, which created that inutile
regulatory body, is clear that the State — which is led by the head of
state or Chief Executive, a.k.a. the President — is responsible.
Epira’s
Declaration of Policy in Chapter 1, Section 2, subsections (d) and (h),
state that the government is mandated “To protect the PUBLIC INTEREST
as it is affected by the rates and services of electric utilities and
other providers of electric power; (and) To establish a strong and
purely INDEPENDENT regulatory body and system to ensure CONSUMER
PROTECTION (emphasis supplied)…”
The President oversees all
agencies of the State to ensure that they function as defined by law.
And in the ERC and the power sector’s case, as provided in Section 23 of
Epira on Functions of Distribution Utilities, government must ensure
that “A distribution utility shall have the obligation to supply
electricity in the LEAST COST MANNER (emphasis ours) to its captive
market, subject to the collection of retail rate duly approved by the
ERC.”
Filipino consumers, as represented by countless people’s
organizations and advocacy groups (now joined by the aforementioned
trade and labor organizations), are rightfully clamoring for the Chief
Executive to take action on what has become an undisputed, factual, and
glaring decade-long massive overpricing of electricity in this country —
long the bane of our economy, industry, and social well-being.
It
is a situation aggravated by the ERC’s demonstrable collusion with the
biggest electricity distributor, Meralco, when on Dec. 10, 2004 it
adopted the 15.8-percent Performance Based Regulation (PBR) scheme in
place of the already thoroughly scrutinized 12-percent Return-on-Rate
Base (RoRB) formula, in clear defiance of a 2003 Supreme Court (SC)
decision under Chief Justice Reynato Puno reaffirming the RoRB;
disallowing Meralco’s pass-on of its corporate income taxes to
consumers; and subjecting the power distributor to an examination of its
books by the Commission on Audit (CoA) — which found, in test years
2004 and 2007 alone, that the company again overcharged customers to the
tune of P7 billion.
The defiant implementation of the onerous PBR
did not only prove that the ERC saw itself as a power above all; it
also resulted in up to 80 percent annual increases in Meralco’s profits
from 2008 to 2010, on nothing more than what the power company admits to
be a paltry 3-percent increase in its customer base.
Clearly,
those profit jumps — P2.7 billion in 2008; P6 billion in 2009; and P12
billion in 2010 — couldn’t have been on account of Meralco’s 11-percent
increase in sales volume.
According our colleague Romeo Junia,
when “PBR was instituted, Meralco’s per kWh distribution rates have gone
up — from P0.9657 in 2003 under rate unbundling, to P1.2227 in May
2009, to P1.4917 in May 2010, to P1.6464 this year (P1.5828 in 2011 to
be able to claim a “decrease” when it should only be P0.90), and to
P1.9036 by 2015. That rate was P0.7957 per kWh in 2003 under the Return
on Rate Base…”
That’s why the rate increase from the RoRB’s 12
percent to the PBR’s 15.8 percent was already a violation of the “least
cost” provision of the Epira, not to mention Meralco’s franchise under
RA 9209 (Section 4) which holds, “The grantee shall supply electricity
to its captive market in the least cost manner… (It) shall charge
reasonable, just, and competitive power rates for its services to all
types of consumers within its franchised area in order that business and
industries shall be able to compete.”
The ERC defends its
re-formulation of the pricing mechanism by insisting that it has to
follow the Epira provision that provides for “just and reasonable
profit” for the service providers. But even 6 percent in profit is
already “just and reasonable” according to Iligan Light power company
director Jojo Borja who says, “Our family has been in the power business
for 80 years; we were happy with 6-percent profit and it was an
honorable business. With Epira, what we used to earn in one year we earn
now in two months, and for Meralco it’s even shorter.”
TUCP
Party-list Rep. Democrito Mendoza should thus tell his House leader to
shut up about his push for Charter change (Cha-cha) to “entice foreign
capital” because, as Mendoza said so himself, our power rates are by far
“the biggest disincentive to the entry of new foreign direct investors
to our shores.”
Good thing Mendoza already addressed this demand to Aquino III directly instead of the ERC.
But,
as the issues in the power sector already go beyond just price gouging,
involving economic sovereignty, sabotage, and plunder, Malacañang
should never be allowed to shirk from its primordial duty to protect the
consumer and, more importantly, the nation and its economy. So to
Noynoy, we say: It’s your responsibility. Take heed or else…
(Tune
in to Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m. on
1098AM; Talk News TV with HTL, Saturday, 8:15 to 9 p.m., with replay at
11 p.m., on GNN, Destiny Cable Channel 8; visit
http://newkatipunero.blogspot.com for our articles plus TV and radio
archives)
(Reprinted with permission from Mr. Herman Tiu-Laurel)
Source: The Daily Tribune
URL:
http://www.tribuneonline.org/commentary/20111103com4.html
In
the good old days, the good guy wore the white hat and the bad cowboy
wore the black hat. The good one stood for generally accepted human
values defending what is acceptable in all societies, while the bad one
represented what we all fear, the dark colour of his clothes
representing the night, evil, fear, the Devil. And today?
Raw
materials continue to lose their value on world markets. According to
Standard & Poor's GSCI Spot index, the quotations hit the minimum
level in nine months on October 3. The reduction of the prices occurs
due to expectations of the economic decline, as well as owing to the
decline of demand on primary goods. The growth of the Russian economy
has slowed down as well.
Never
have I felt so revolted, disgusted, disappointed and violated at
belonging to the same species as those sickening creatures crawling
around our international community today. The Libya Question and the
subsequent UN General Assembly in September was a study in
spinelessness, lack of morals, absence of fibre and total disrespect for
the law.
