ERC Must be Cured Not Abolished Nor Crippled

Posted on: Sep 16, 2017

David Celestra Tan, MSK
15 September 2017

There is no question that the ERC has not been living up to its mandate to protect the consumers, to assure long term supply at fair and reasonable rates. In our book we give them a grade of 65% as an institution, failing in many measures. Our electricity rates are the highest in Asean because of this failure.

We interact with many of their Commissioners, directors, and employees and most of them are competent professionals with true dedications to public service. That’s why we are scratching our heads why this agency as an institution has been doing so badly as an electric industry regulator and seemingly cannot find its way back to true public service.

Many members of Congress, and the consumers they represent, are frustrated with the regulatory agency and it is understandable that they would use whatever congressional power (like budget approvals) they have to jolt this organization if only to make them shape up. The threat to give them only P1,000 budget is a major message. It could cripple the critical public services agency though and we lose the 65% that they do right. Further, we would be barking at the wrong tree.

The Energy Regulatory Commission badly and urgently needs to be reformed in their regulatory philosophy, rate setting methodology, transparency, honesty, and commitment to their mandate under Section 43 of the Epira Law that created it. No argument about that. The Epira Law may even have to be amended.

Things have to start with giving it proper leadership and the President of the Philippines is in a position to do so by appointing a good Chairman. One chosen for integrity, competence, and independence from major power industry players.

There is really no need to shorten the tenure of the now more experienced current four (4) Commissioners. What they need is a new clear mandate from the President. It can be as simple as a “do your job and be faithful to your mandate under Section 43 of the Epira Law. Be transparent and no corruption. Serve the public interest. Create competition and reduce rates. Do what is necessary. No sacred cows” (this last one is very important).If they are disobedient, then the President may need a new team. But first he has to find a good leader who can carry the torch for the consumers.

To be fair, most of what ails the regulatory agency were done by the previous Chairmen and Commissioners. However, the new set of officers have no excuse in not correcting the anti-consumer methodologies.

Abolishing the ERC will cause infinitely more harm and disruption than good. The options for performing the regulatory functions are much worse. Even creating a new regulatory agency will set us back and the consumers are the ones who will suffer.

So how do we gauge whether the current ERC is not beyond salvaging?

Your consumer organization has filed with the ERC several petitions to improve the methodologies and those can be used as tests of whether the current ERC can still serve the public interests or is already hopelessly compromised.

1. Petition to change the PBR Rate Making Methodology to prevent overcharging

The ERC is allowing Meralco to make money on things they have not invested. Under PBR they have effectively deregulated the profit limits of this public service utility. They took the position that the 12% limit ruled by the country’s Supreme Court does not apply because the “economic conditions” are different. Now Meralco regularly makes a 25% annual return on equity AFTER TAX. We would like ERC to be on the side of the consumers and country. Itama lang natin.

2. Systems Loss

The ERC’s own rules put a limit of 8.5% systems loss. But the captive customers that use 70% of Meralco’s energy are charged more than 10.3%. Instead they reduce the systems loss to industrial customers to only 4% and have the temerity to boast that their systems loss is only 6.5% which is the overall average. A regulatory agency with their hearts in the right place for consumers would enforce the 8.5% limit and no customer should be charged higher. It is Meralco’s option to charge certain customers lower but never higher than the 8.5% limit. Itama lang natin.

3. Guard Against Cartelization

It can be argued that the ERC Commissioners committed a misjudgment when they inexplicably extended the deadline of the CSP implementation by six months that enabled Meralco to fast track the signing of 3,551mw of midnight contracts four (4) days before the new deadline. The courts will decide whether there were improprieties.

The ERC however has a clear obligation to assure that the negotiated contracts did not create a cartel and cartelization is clearly prohibited by the Epira Law. The ERC’s duty to investigate and assure that there is no cartelization cannot be disputed.

Your consumer organization MSK has filed a petition with the ERC to investigate and stop the resulting Meralco Cartel. This would be a loud indicator of for whom the ERC Commissioners bell tolls. Consumers or vested interests? Itama lang natin sana.

The ERC needs to be cured not abolished nor crippled. But let us wait to see which one they deserve. In many ways the fate of the institution is in their hands.

MatuwidnaSingilsaKuryente Consumer Alliance Inc. matuwid.orgdavid.mskorg@yahoo.com

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Comparing Philippine Electricity Rates vs Asean – Just the Facts

David Celestra Tan, MSK

September 8, 2017

Most Filipino consumers know that every month their electricity bill takes a significant part of his budget.  And he better pay up or his lights will be cutoff.

One side of his brain is revolting but the other side is being brainwashed into believing that it is just life and all people are paying the same.  They are also told that the reason Meralco’s rates are high is because our Asean neighbors are subsidizing their power rates.

Recently some reports are headlined that Philippine power rates are the same as Singapore as if that should be a consolation.

So let us just get to the facts. What is the truth?

The Philippines is the highest in Asean together with Singapore at P5.84 per kwh. But that is only for the Industrial Sector. Still, Thailand is lower by 8%, Malaysia by 19.35%, Indonesia by 71.58%.

For Commercial customers, the Philippine rate for 2015 was P7.49 per kwh and Singapore was only 3% lower. Thailand was lower by 28.3%, Malaysia by 33.64%, and Indonesia by a whopping 71.30%.

 For Residential customers, The Philippine rate is the highest ay P8.90 per kwh and Singapore is lower by 18.32%, Thailand by 38%, Malaysia by 32.36%, and Indonesia by a mindboggling 85.51% at only P1.29 per kwh.  That is one hell of a government subsidy.

One reason our neighbors have lower rates is because they use more natural gas generation compared to us that uses more coal.  That is right, LNG. Despite this, your beloved Meralco negotiated with its sister company MeralcoPowerGen 4,011mw of power projects, all coal! Then they are unabashedly claiming that they are looking for “least cost power”.

Let us remember that in the case of Meralco, 30% of their energy sales are from Residential customers and 40% to Commercial customers. Both of these customer class are charged by Meralco at much higher rates.

Meralco’s charge to all classes of customers for generation is uniform at P4.1299 per kwh in December 2015. One reason their rate to industrial customers is the same as Singapore is because Meralco works hard and gives better deal to these contestable customers.

For example, Meralco’s systems loss charge to industrial customers was only P0.1681 per kwh or 4%.  This is lower than the systems loss rate that Meralco has been boasting about at 6.47% which beats the government limit of 8.5%. Admirable on the surface.

However, Meralco’s systems loss charge to commercial and residential customers as of December 2015 was P0.4322 per kwh or 10.46% of the generation charge which is the right way to compute it.

(Systems loss is the amount of power that Meralco purchases but lose in its system and not able to sell.  Its amount must be based on the amount of the average generation rate.)

The systems loss of 6.47% being publicized by Meralco is the average for all its customers. It is being tolerated by the ERC.  The law says the limit should be 8.5%.  Your consumer group MSK had filed a petition asking ERC to enforce the 8.5% for all customers, not average. So far we have not heard from them.

Currently, commercial and residential customers that comprise 70% of Meralco’s sales are being charged 10.46%, much higher than the 8.5% limit.  In effect, Meralco’s rate for industrial customers is lower partly because they charge them only 4% in systems loss, less than half what they charge us, the captive customers.

We believe the numbers also show that Meralco charges industrial customers lower for distribution, metering, and supply fees.

We also estimate that our Asean neighbors have much lower generation charges than Meralco’s P4.1299 per kwh in December 2015. We are sure if Meralco’s procurement for power supply that it passes on to the consumers are done on arms length manner and honestly trying to achieve least cost power as their franchise require, our generation rate will be much lower by 10 to 20%.

As long as the government is allowing Meralco and the other private DU’s to negotiate the power supply with sister companies and our rate setting methodologies are anti-consumer,  the Philippines will always have the dubious distinction of having the highest rate in Asean.

Being the same as Singapore in 30% of the user base is not good enough. Our economic rivals are Thailand, Malaysia, Vietnam. And we are at a big disadvantage against them in the critical power production cost.  Sadly, it does not need to be this way. Someone in the government especially the ERC just need to move for the consumers.

When will that happen?  We continue to hope. That’s all we have for now.

MatuwidnaSingilsaKuryente Consumer Alliance Inc.

Meralco’s CSP Of Solar Proves Consumer Benefits of True CSP … and the Excessive Cost of Fit Subsidies

David Celestra Tan, MSK

20 August 2017

Meralco, after their apparently successful circumvention of the CSP policy for their 3,551mw of 20 year coal power contracts, is now highly publicizing their embracing competitive selection process (CSP) for renewable energy supply, mainly solar. And it is quite revealing.

Meralco heralded their signing of contracts 50mw of solar power from Solar Philippines at P5.39 per kwh, another 50mw at 4.69 per kwh from PowerSource, and now 85mw at only P3.50 per kwh from Citicore on swiss challenge. All within a matter of months. Note that just a year ago in June 10, 2016 Solar Phils CEO Leandro Leviste announced that they can sell solar at P4.00 per kwh. Now Meralco is boasting that it signed for P5.39 per kwh? That’s a premium of P189 million a year! Was there a Loren factor?

Meralco also originally agreed to a P5.39 per kwh price with PowerSource out of a Bulacan location. The swiss challenge was submitted by Equis of Singapore at P4.69 per kwh which PowerSource immediately matched. It is curious that no one dared to challenge the P5.39 rate of Solar Philippines when there are at least 200mw of stranded solar projects that were left out of the 2nd fit despite meeting the March 2016 deadline.

Meralco apparently is content with boasting that these contracts are lower than the P8.69 per kwh FIT, a very high bar to beat easily.

Now Solar Philippines is offering only P2.95 per kwh in the Citicore Challenge! Yet another evidence that the consumers will get much better rates under a true CSP. Why don’t they just do a straight CSP for solar and RE? The difference is almost P2.00 per kwh and P4.69 under Solar FIT.

The solar alliance

Efforts through the National Renewable Energy Board (NREB) a government agency that seem to act as lobbyist for subsidies for the solar industry are continuing for more government (actually consumer) subsidies.

If we assume that the true market rate for solar is now at P3.50 per kwh which is on par with the international rates in the middle east and latin America, then the FIT losses of the government on solar is P5.19 per kwh. 500mw of solar projects in the 2nd FIT round would cost the consumers is P5.2 billion a year or P104 billion for 20 years on them alone.

Solar needs to be lower than coal and natural gas. Because solar is only intermittent with only 6 to 7 hours of generation and little when the rains, clouds, and typhoons come. The utilities still need to buy reserve power and for the remaining 18 hours of reliable continuous power supply. Even storage batteries become cheaper, solar power for the grid can be extended only a few hours during nighttime. Storage batteries can be more economical for rooftop solar when homeowners use more power at night peak. To the solar lobbyists who go overboard and claim that they can replace coal, geothermal, natural gas, just try to be more realistic. It is ruining the credibility of solar.

There is nothing wrong with establishing Renewable Power Standards or RPS with a target minimum of utility purchases and RE installations. However, they must be all subjected to straight competitive bidding. Swiss Challenge is not really competitive because few people decide to really take the time to bid, only to be matched by a favored proponent.

We, and Meralco, have seen the good results of competition for consumers. Why are we insisting on all sorts of variations that only hoodwink us into believing it is a CSP. The drop in international rates for solar had been known even before they finalized the P8.69 rate. Why did we even continue to dole out those subsidies?

Filipino electric consumers do not really get any respect. They are the meek and subservient people to take advantage of. And the government is of no help either.

When will we get a savior?

Matuwid na Singil sa Kuryente Consumer Alliance Inc.

matuwid.org

david.mskorg@yahoo.com

LIGHT ON THE DARKNESS OF CORRUPTION OF ELECTRIC COOPERATIVES IN MINDANAO

By David A. Tauli, President, Mindanao Coalition of Power Consumers

In the year 2104, sixteen electric cooperatives in Mindanao entered into long term power supply contracts with the 405-MW coal power plant of FDC Misamis Power Corporation located in Villanueva, Misamis Oriental, at a price of 5.40 pesos per kilowatt-hour. These power supply contracts were anomalous, having been entered into by the ECs by violating the requirement of the EPIRA for distribution utility companies to carry out least-cost acquisition of power supply for their consumers. This requirement for least-cost acquisition entails among others that the distribution utility companies should carry out public bidding for their power supplies. No public bidding for power supply was carried out by any of the ECs that entered into the anomalous power supply contracts.
In the same period when the miscreant ECs entered into power supply contracts with the FDC coal power plant, two other coal power plants, the 405-MW coal power plant of GNP in Kauswagan, Lanao del Norte and the 300-MW coal power plant of San Miguel (SMCPC) in Malita, Davao del Sur were also offering long-term power supply contracts at prices of around 4.00 pesos/kWh and 4.20 pesos/kWh, respectively. Thus, the deviant ECs would be defrauding their member-consumer-owners (MCOs) in the amount of at least 1.20 pesos per kWh of power supply from the FDC coal plant, and enabling the FDC Misamis Power Corp to earn exorbitant profits in the same amount per kWh. The estimated additional profits of FDC-MPC from the anomalous contracts would have been at least ninety (90) billion pesos over the 25 years of commercial operation of the coal plant.

ERC’s Reasons for Postponing CSP Implementation Weak and Not True.

Evelyn VirayJallorina, Alyansa Para saBagongPilipinas

16 July 2017

The justifications being given by the Commissioners of the Energy Regulatory Commission for their postponement by six months of the implementation of the Competitive Selection Process, or CSP bidding policy,  are weak, not true, and only shows that the ERC abused their discretion. Effectively they deprived the consumers the protection from the sweetheart prices and terms from negotiated power supply contracts between sister generators and distribution utility.

In their recent press statements, Commissioners Taruc and Non of the ERC claimed that “the extension of the CSP implementation was not intended to benefit any electric power industry participant, but to give time to those who have already completed their power supply agreements [PSAs] but failed to submit the same to the ERC prior to the effectivity of the CSP,”

They further claimed “The ERC, soon after its promulgation of the CSP in November 2015 until April 2016, received letter-inquiries from DUs and gencos assailing the legal implications of the CSP to the PSAs that are currently existing, due for renewal, submitted to the ERC for approval, or otherwise already executed.”

These Meralco statements are not truthful.

ABP has documents to prove that the ERC received only seven requests for reconsideration from distribution utilities who had signed power supply agreements as of the November 6, 2015 but had not yet filed their ERC applications. The total was less than 500mw. Meralco itself had one request for an interim supply for the summer of 2016. Instead of addressing these specific requests for additional time to file during a transition period, the ERC Commissioners inexplicably deferred the implementation of the CSP effectivity by six months from November 6 2015 to April 30, 2016. This is serious abuse of discretion.

The biggest beneficiary of the six month postponement was Meralco and its sister company MeralcoPowerGen who on April 26, 2016, just four (4) days before the new deadline of April 30, 2016, signed four PSA’s totaling 2,656mw and the following day on April 27, 2016 signed two more totaling 670mw. Only one contract of the seven (7) midnight contracts signed by Meralco was signed on April 20, 2016. It was for 225mw with Redondo. The ERC applications of the seven (7) midnight contracts were all filed at 7am on April 29, 2016, the day before the new April 30, 2016 deadline set by ERC. All seven contracts are with joint ventures owned 49 to 51% by MeralcoPowerGen.

These seven Meralco PSA’s effectively circumvented the CSP policy with the assistance of the ERC who conveniently postponed the implementation of the deadline. This denied the consumers the benefit of true bidding with a minimum higher generation charge of P12 billion a year.

The Alyansa Para saBagongPilipinas had filed a criminal and administrative complaint with the Office of the Ombudsman against the ERC Commissioners.

Meralco

Meralco for its part claims that they are not one of those who wrote ERC asking for the CSP postponement. “there is absolutely no factual basis to claim that these are  ‘midnight contracts’,” Lawyer William S. Pamintuan, Meralco first vice president and head of legal and corporate governance, cited that in fact, negotiations on one of the contracts “started way back in 2012 and was only concluded and signed in 2016.” Meralco negotiated these PSAs in utmost good faith and the resulting rates and other terms and conditions that were filed before the ERC are very competitive and favorable to consumers,” he stressed.

Meralco further noted that “each of the PSAs had undergone a very rigorous, lengthy and at times, contentious negotiation process with the generation companies which actually took many months and years before these agreements were signed and filed with the ERC.”

Meralco’s half truths

Meralco’s assertions are self-serving claims.We can grant that Meralco’s contract negotiations with its sister company MeralcoPowerGen were “very rigorous, lengthy, and contentious” but they cannot credibly claim that they did so for the least cost interest of the consumers. The only way to really do that is to open the contracts to true competitive bidding.
As to Meralco’s claim that they were not one of those who wrote ERC for consideration on CSP deadline. This might be technically true. But it is a matter of record and media that Meralco had been asking for a delay of the implementation of CSP. They also asked for voluntary CSP.  They don’t want a Third party to oversee the CSP. Their Chairman said the CSP is illogical and will work against the consumers. They even threatened ERC with a lawsuit.

Meralco is also reported to have been informally lobbying in the months of October 2015 to February 2016 with ERC to be allowed to do “swiss challenge” bidding which is clearly intended for them to control the process and the awards.

In the American TV show “law and Order”, one of their tricks in finding the motive for a crime is to “follow the money trail”. Who will benefit most from the crime?  In the mysterious ERC postponement of CSP by six months, the party who would most benefit was Meralco who had  been busy negotiating for months with “strategic partners” who are willing to be Meralco’s minority partner.

But the fact of the matter is as of November 6, 2015 they were not even close to signing an agreement with these partners. As of April 30, 2016, they don’t appear to even have a partner for the 1200mw Atimonan One.  Aboitiz was identified as the partner months after.

Meralco spokesmen claim that one of the contracts started negotiations in 2012. He is referring to Redondo. But the delay was not because of contract negotiations but because of the writ of kalikasan environmental opposition to the Subic coal plant.

The ERC Commissioners are not being truthful on the postponement and it is borne by their weak argument and evidence. Both ERC’s and Meralco’s alibi’s are contradicted by evidence…..and simple logic.

Alyansa para saBagongPilipinas (ABP)

 

Power Crisis Would be Coming If We don’t Act Now!

David Celestra Tan, MSK

4 July 2017

The National Capital Region, the nerve center of the country’s economic activity, will soon be facing a “power crisis” sometime between October 2017 to March 2018. Or there would be a big spike in the WESM prices that will be blamed on lack of power supply.Or both.

All it will take is a confluence of events like several coal plants declaring downtimes due to “boiler leaks”, hydro power being low, NGCP power grid problems, Malampaya shutdown, and etc.

Then the media campaign will go on the high gear for the fast approval of pending MeralcoPowerGen projects (remember the seven (7) midnight contracts totaling 3,551mw). The energy family, the power committees of Congress, the DOE, the ERC, PEMC, NGCP, and DENR will also rise in unison to “protect the public and consumers” and call for the urgent approval of power generations projects, conveniently 80% of which are Meralco’s negotiated power supply projects.

Conveniently they will blame the consumers groups specifically ABP, Bayan Muna, and MSK for causing the delay in these negotiated projects. ABP for filing cases at the Supreme Court and Ombudsman.Bayan Muna for launching a congressional investigation.All effectively freezing the Energy Regulatory Commissions processing and approval of the negotiated contracts. The DOE itself is ominously silent on the issue.

MSK for its part feel that these 3,551mw of midnight contracts, all with project companies controlled by MeralcoPowerGen, the 480mw of Mauban expansion called San Bernardino Power, and the Metro Pacific’s purchase of controlling interest in the 1,000mw Global Business Power, which also now purchased 50% of the Alsons coal projects in Mindanao,will result to evident and alarming monopolization and cartelization of the power generation sector, something that the Epira Law had mandated the ERC to guard against as part of its motuproprio duty. MSK had accordingly petitioned the ERC to suspend the processing of these Meralco project applications and hold hearings first to determine if these projects will create harmful monopolization, market power abuse, and cartelization. ERC seems not interested in making that determination or they are too busy dealing with the convolutions of their suspended Chairman.

The Calm Before the Storm

All these could be part of the orchestrated calm before the storm. Meanwhile, the Meralco coal projects and their strategic partners continue to announce the pursuit of pre-construction activities like DENR and BOI approvals, award of EPC contracts, project finance packaging.

Why is everyone so quiet? This is the calm before the storm.

If the ERC is unable to act because they were the ones who extended the CSP implementation deadline that allowed these Meralco contracts to sneak in just days before the new deadline of April 30, 2016, it is curious why the Department of Energy whose job it is to assure power supply development, is staying clear of the subject. Instead they are saying the DOE is technology neutral or the cuter word “technology agnostic”. The Supreme Court also had not acted.

Power Crisis Syndrome

The power generation oligarchy saw it worked wonderfully during the power crisis of 1990’s. A power starved or threatened nation will beg for power supply at whatever cost or at whatever shortcutting of competitive processes. That’s the “power crisis syndrome” that now, 25 years later, is still being used again and again whenever they want to ram power projects through the throat of the hapless consumers.

The consumers can only continue to hope for a savior. Meanwhile we are down on our knees praying or begging.

 Let us brace for the coming power crisis. real, imagined, or staged.

Let us act now before it is too late!

MatuwidnaSingilsaKuryente Consumer Alliance Inc.
Matuwid.org
david.mskorg@yahoo.com

Dominant Power Generators Bat to Keep EPIRA Law with only minor changes.

Posted on: Jun 28, 2017

David Celestra Tan, MSK
25 June 2017

Should the EPIRA Law of 2001 be Implemented fully with only some minor provisions? Or should it be totally amended or even repealed as called for by the Party-list group Bayan Muna and various consumer groups?

On one end of the spectrum are the lucky vested interests that benefited handsomely from the massive transfer of government generating assets at firesale prices to a chosen few who were in the position to take advantage under the rules of the Epira Law. The same groups are profiting handsomely from the high electric rates resulting from self-negotiated rates, porous rate setting regulation, unbridled cross ownership, and  loosewesm rules.

On  the extreme opposite are the Filipino people either as taxpayers or electric consumers who are shouldering the heavy load of the unpaid debts of the PSALM after they ironically have fully paid for the take or pay BOT contracts of those power plants. As electric consumers, they are paying the resulting high electric rates.

The answer to the question of whether the EPIRA law must be amended or retained as is depends on which end of the cost-benefit spectrum you fall since the implementation of the Epira Law  16 years ago.

Let the EPIRA Good times roll!

As offshoots from a recent “Powering the Philippines” forum, the dominant power generators have comeout pushing for urgent and continued implementation of the current EPIRA to assure power supply for the future, calling for faster implementation of projects.

A technology supplier to the power generators is claiming P51 billion a year in savings from more investments in power. These “industry stakeholders observed more private-sector involvement in the energy industry, ushering in new power projects that boosted the country’s power supply, ultimately benefiting consumers.”

“ There is a lot of power projects that came on stream for the last three or four years and a lot of capacity still coming on stream.”  (no argument there).

Another dominant group said “Epira has been very effective. The government is no longer guaranteeing take or pay contracts. It also has freed balance sheet so it can use resources for other areas of development. PRICES HAVE COME DOWN. We now have ample supply. Plants that were privatized have now been rehabilitated and now more efficient and reliable” (mostly true except the dubious claim that “prices have come down”.)

Another conglomerate said “Epira has demonstrated how open competition helps lower power prices”. Epira should be fully implemented soon, especially the WESM in Mindanao and RCOA at household level”

The country’s dominant coal conglomerate said “some of the goals of the Epira cannot be felt now. Regulatory bodies like Energy Regulatory Commission are not stable, electricity prices yet to be optimized due to effect of take-or-pay contracts still in effect, SPUG areas need accelerated program of development”

Meralco for its part predictably chimed in “the Epira has encouraged competition especially in the power generation business. The law also increased efficiencies in distribution as evidenced by all-time low systems loss levels”.  

(Can you believe these guys saying these with a straight face? We mean, Meralco just negotiated without competition 4,000mw of power supply with five chosen generators as strategic partners, committing 80% of their energy needs for the next 20 years).

The power generation association PIPPA  had been espousing that the “EPIRA law should be allowed to stay the course and prove its benefits”.  Never mind that 16 years after the generation sector is consolidated to a chosen few revolving around the two main power distribution utilities group, Meralco and the Aboitiz Group of Cebu and Davao. The three metropolitan areas distribute 70% of the national electricity consumption.

If you are one of these blessed groups, obviously you would not want the gravy train upset. You control the distribution sector and the power market that it represents. You can form your own power generating companies and negotiate long term power supply contracts with yourself or strategic partners that who also control. You get sweetheart prices and terms. All courtesy of the loopholes of the Epira Law section 45 and Epira IRR Rule 11.  When the consumers or any conscience driven person complains, you create a power shortage scenario with a few brownouts thrown in. Then your friendly legislators and government officials scamper to get your projects approved.  Never mind that they did not go through bidding. You get away with everything.  Just another day in the office and you laugh all the way to the bank.

How about the Electric Consumers?

They have been feeling the pain of the high power rates. But the power oligarchs are so powerful and make so much money, consumers are brainwashed into thinking that the rates are fair and reasonable. They are made numb to the issue by media disinformation. Consumers pay up otherwise their electric service is disconnected. 

Things will not change unless someone powerful enough will step up. So far the ERC had not done enough, choosing to carryover the anti-consumer rules adopted by the trapo-politican Chairmen despite the evident resulting disaster to the consumers.  The current good commissioners are buried in the internal strife at ERC and the challenges of digging up all the surprise deals reportedly made by their former head.  Yet these commissioners may have to suffer the fall out of the crisis in integrity at the regulatory agency that needs to have full public trust.

The EPIRA law is supposed to achieve two things: ample power supply and fair and reasonable rates.

Since the power crisis of 1990’s the power industry’s battle cry had been“assuring power supply”.  Or its variation “the most expensive power is not having power”. When that happens you know that power rate is not a priority and it certainly will be going up. Supply contracts were mostly negotiated.

The dominant distributors cum generators have been having it so good.  Now they are campaigning to preserve the status quo of the Epira law and let the good times roll.

It is time for the country to focus on achieving fair and reasonable rates. It is the turn of the consumers to benefit and be treated fairly under the Epira Law.

MSK had filed for petitions for the modification of the PBR rate making methodology that effectively deregulated the profits of the distribution sector. ERC’s rules on systems loss recovery and computations are non-transparent.  Power generation contracts that are passed on to the consumers need to undergo a resolute implementation of the CSP policy.  Why did we postpone it for six months, allowing the elephants to rampage through the gate and ravage the consumers?

The current impasse (at least on the surface) on Meralco’s seven (7) midnight contracts of 3,551mw will soon quickly degenerate into a power crisis threat to the public . The cartel of MeralcoPowerGen and their five chosen generator partners who would control 10,000mw of the country’s installed capacity of 16,000mw. Cartelization which is unequivocally abhorred by the Epira law is clearly on the horizon.

Consumer Aproar

Consumer groups are calling these as midnight contracts. The Alyansa para saBagongPilipinas (ABP) filed a petition for injunction at the Supreme Court asking that the ERC extension of the CSP be declared against the public interest and made null and void. ABP also filed an administrative and criminal complaint with the Office of the Ombudsman against the ERC Commissioners for abuse of discretion and dereliction of duty. Party-list Bayan Muna launched a congressional investigation into the seven (7) midnight contracts. The MatuwidnaSingilsaKuryente Consumer Alliance Inc (MSK) for its part petitioned the ERC to suspend hearings on the Meralco applications and investigate first whether the seven projects totaling 3,551mw plus the 480mw Meralco signed with the San Bernardino project constituted market power abuse, anti-monopoly, and will result to cartelization as is the regulatory agency’s motuproprio duty as section 43 of the Epira law.

Things are Ominously Quiet

In the face of these irregularities, neither the ERC or DOE had stepped up. Meanwhile, it is ominous that the proponents of the questionable projects continue to announce the signing of their various construction contracts.  It seems they know something we don’t. 

If we have to guess, it seems the impasse on Meralco’s mid night contracts will be allowed to degenerate into a power crisis in a matter of months and then the energy officials including the legislators will be put into a corner afraid to be blamed by the public and the media  for obstructing power development.  Same “power crisis gambit” from the early 1990’s.Now 25 years later, the old trick is still being perpetuated upon the hapless consumers.  Why is there a seeming conspiracy against the Filipino electric consumers? 

The media campaign of the dominant generators appear to be part of this gameplan.

The more things change, the more they stay the same.

MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.co