Category: electricity

Professionalism and the ERC

By Randy David

So complex and demanding are the functions and responsibilities of the Energy Regulatory Commission (ERC) that the law that created it pegged its members’ compensation at the same level as that of justices of the Supreme Court. Every section of Republic Act No. 9136, known as the Electric Power Industry Reform Act of 2001 (Epira), squarely puts the burden of protecting the interest of consumers and ensuring competitiveness in a deregulated industry on the shoulders of the 5-member commission.

Read on… 

year-end gripes, and a dream

parang not since the impeachment trial of erap 2000-2001 has the holiday break been so politically charged.

the outrageous hike in meralco bills continues to jolt especially because the supreme court’s 60-day TRO came too late for some customers who have already paid their december bills.  energy regulatory commission, sleeping on the job?  or just happy for the power industry that’s raking in such profits?  vested interests maybe?  bakit ngayon lang naisip yang bid price cap sa spot market?  what’s going on?  testing our limits?

and what about energy sec petilla’s resignation kuno for failing to fully restore electricity to yolanda-ravaged provinces…  for a while there ka-excite-excite the prospect of petilla taking up the cudgels for oppressed electricity consumers vs power oligarchs, but that fizzled out soon enough, pa-cute lang pala, knowing full well that the president would not let him go?  nakakainit ng ulo, nakakainis, to find that he’s just another traditional politico with a moist eye on the palace, or first the senate?

and what about the Tarlac Devt Corp, said to be the manager of Hacienda Luisita, bulldozing farmlands (that farmers have been farming for years), claiming that the land belongs to TADECO and not part of the Hacienda luisita area ordered distributed by the supreme court.  ganoon?  if it has long been farmed by the farmers who claim it, and they have papers showing no other claimants since, what claim does TADECO have on the land?  sino bang may-ari niyang TADECO na yan?  hindi ba ang mga cojuango rin na may-ari ng Hacienda Luisita?  whatever, whoever, it’s a case that should be settled in court, according to the agrarian reform law, and not with bulldozing strong-arm tactics.

and what about the binay brouhaha aka dasmagate…  as though the binays, like most politicos since forever, have not always behaved this way, what are they in power for, and all that jazz.  what was unusual was that the security guards said no, and yet not one in media has told us with certitude that it was because they did not recognize the mayor (and why not? hindi sila taga-makati?), or they recognized him but weren’t told the rules re VIPs until after the incident.  it would also help to know if this was the first time the mayor tried to exit through this gate before, or if he had done it countless times and never had a problem.  come on, media, level up naman.  and you might want to check out a rumor that dasma has opted to change security agencies anyway?  i’d love to hear that it’s not true.

and speaking of binay the mayor, what about the hate campaign crackling on social media vs binay the veep, patriarch of an entrenched dynasty, who would (intends to) be prez in 2016.  nakaka-freak out naman talaga the prospect of a binay presidency, with abigail in the lower house and nancy in the senate.  kulang na lang, mga alipores sa judiciary.  yari tayo, ika nga.  from the frying pan into the fire.

unless, of course, tamaan ng nakaliliwanag na kidlat si jejomar binay, ala saul sa damascus, at ma-convert siya back to human rights advocacy, as in the days of marcos (before cory made him officer-in-charge of makati, what a plum prize).  full circle.  abigail, junjun, and nancy would resign out of delicadeza, and in support of their father’s new politics, anti-poverty, anti-corruption, anti-patronage, anti-status quo, pro-environment, for a change.

a pipe dream, yes, but if there’s one who could make it happen, it’s binay, if he only cared enough for this bayang sawi of ours.

php 4.15 power rate hike – outrageous and obscene

and yet the palace’s first reaction was to defend it — not arbitrary, not unreasonable, it is based on the law.  ah, yes, the Electric Power Industry Reform Act of 2001, the infamous EPIRA that the senate of the eleventh congress passed in the last minutes of the gloria arroyo regime, with the promise that privatization of NAPOCOR would bring down the cost of power to the consumer.

yeah right.  according to a bill filed by senator gringo last year re mindanao’s power problems, when EPIRA became law in june 2001, the retail price per kilowatt hour was php 5.32. in march 2011 it was php 9.84. last month, says boo chanco, it was php 11.06.  the php 4.15 hike would make it php 15.21.  check your last meralco bill and weep.

i’m aghast that the palace made that mistake at all, defending that obscene price hike as though we were talking in centavos rather than pesos in today’s foreign exchange, and as though the department of energy were not remiss in its duties to the public.

mabuti at natauhan sila.  konting damage control, better late than never — coloma pleading that private power companies practice corporate social responsibility, voluntarily desist from passing on costs to consumers, esp in the wake of yolanda, and energy sec jericho petilla promising to investigate and to fearlessly call out the unscrupulous ones, if any, no matter how powerful or powerfully connected. (dec 7 teleradyo with henry omaga diaz)

petilla won many many pogi points when he promised to restore electricity to yolanda-ravaged regions by christmas eve, or he would resign.  on twitter he has been praised to high heavens and a rosy 2016 run-for-whatever-position predicted.  hmm, too soon to tell, even if he’s smooth and simpatiko and all that.  i heard him saying that he does not know how much the restoration will cost, but he will do it, whatever the cost, bahala na.  which is truly nakaka-tense for the visayas.

surely petilla knows that the problem,whether in luzon, visayas, or mindanao, is the EPIRA.  here’s what freedom from debt coalition’s leonor briones said in an open letter to the president in april 2012 when mindanao was gripped by brownouts and higher costs.

Mr. President, the highly flawed policy framework of EPIRA or Electric Power Industry Reform Act is the problem behind the Mindanao power supply issue. This law is designed for big business interests, not for public service. Before EPIRA was passed, the former National Power Corporation was responsible for generating electricity as well as developing power transmission lines. But EPIRA in effect removed this fundamental role of the State. What EPIRA did was to pave the way for private investors to come in and chart the course of generating electric power in our country. This law also gave the control and management of a major pillar of the industry – our national power transmission lines to a foreign State corporation – State Grid of China with Henry Sy’s SM Holdings Corporations as its partner.

In short, the matter of developing electric power supply and management has been left at the mercy of the private sector, an oligopoly of a few big, long-entrenched family/corporate interests.

kung talagang magaling si petilla, and his heart is in the right place, he would champion the repeal of the evil EPIRA and come up with an alternative reform program that would put the public interest on equal footing with business interests.  there has to be a way, an ethical way.  maybe a price ceiling, a profit ceiling, for this essential expense?  how naive of me?  meralco made a net profit of 17B in 2012, a third higher than the previous year, and surely it’s doing even better in 2013.  how about meralco shouldering the costs instead, for a change?  pay back, pay forward.

but wait, meralco says it’s not to blame, it’s only a distributor (really? no power plants?).  what’s gone up in the Wholesale Electricity Spot Market, meralco says, is the generation charge of the power plants producing the electricity.  hmm.  but WESM was devised to encourage competition and keep prices down.  so what is going on?  speculation by the big players?  capitalist greed as usual?  who runs WESM?  who owns the power plants making hay while malampaya is away?  mga tao ba ito?  mga pilipino ba ito?  sino-sino ba itong mga ito na ang titindi kumabig, in billions upon bllions of pesos, wringing hard-earned thousands upon thousands from consumers.  sila mismo, along with meralco, and the rest of the power industry that have been enriching themselves at our expense, ang may kaya at nararapat na magbayad niyang 4.15 na yan.  hindi naman puwede, hindi naman tama, na pass-on na lang sila nang pass-on, lahat na lang ay sa atin sinisingil, to protect, nay, enhance, their profits.

now senator serge is saying that the malampaya fund should be used to subsidize the rate hike.  WHAT? that’s like saying the rate hike is okay, we just need to find the money to pay the power oligarchs.  senator serge should explain instead why they voted yes to the EPIRA in the first place.  he was part of the senate of the 11th congress that gave the final seal of approval in june 2001, along with robert barbers, rodolfo biazon, rene cayetano, anna dominique coseteng, franklin drilon, juan flavier, gregorio honasan, robert jaworski, loren legarda, ramon magsaysay jr., blas ople, tessie aquino oreta, sonny osmena, aquilino pimentel, ramon revilla, miriam santiago, vicente sotto iii, and francisco tatad.  oh and let’s not forget former president gma who pushed for the EPIRA, complete with bribery, it is said.  you wonder what was in it for arroyo.  is she or her family a power industry player too?

ironically, given how unpopular he is these days, enrile was the only senator who said no to the EPIRA in 2001.  and in june 2008 – power rates had risen to php 8.3/kwh in april from php 7.43/kwh in dec 2007 – upon his initiative the senate (14th congress 2007-2010) introduced amendments to the EPIRA to address the perceived weaknesses and clarify the ambiguous provisions in the law.

Juan Ponce Enrile: Seven (7) years ago, Congress passed Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) with the end goal of providing affordable and reliable electricity to consumers in the Philippines. To achieve this goal, the law provided for the restructuring and deregulation of the power industry, however, there were not enough safeguards to prevent power industry players from manipulating the rates and the unabated transfer of the burden of what are properly costs of doing business on to the consumers. [bold mine]

It is in this light that I pushed for the amendments of the EPIRA in order to correct the flaws of the law and to set additional safeguards that will allow the end-users of electricity to enjoy an efficient, reliable, and inexpensive electric power system. (Posted on Facebook)

read More Senators join Enrile in pushing for EPIRA amendmentsMiriam to foreign traders: Explain pro-EPIRA lobbyEpira amendment bill might not pass – VillarSenators scold foreign traders at Epira hearing.  yes, there was, is, a foreign lobby to stop amendments to the EPIRA.  obviously the lobby was successful.

here’s calling out the senators of the 14th congress: villar the husband, enrile, estrada the son, kiko pangilinan, migs zubiri, pimentel the father, angara the father, joker arroyo, rodolfo biazon, the cayetano kids, miriam santiago, chiz escudero, dick gordon, gringo honasan, ping lacson, lito lapid, loren legarda, jamby madrigal, revilla the son, mar roxas, sonny trillanes, and last but certainly not the least, benigno aquino the son, now the president.  you all owe us an explanation for buckling to foreign pressure.  and you all owe us big time for abandoning us to the mercies of a merciless oligarchy.

it’s not as if life is good, the living easy, for the low- and middle-income masses of luzon that depend on meralco for electricity.  if anything, living conditions have gone from bad to worse, with wages remaining low while prices of essential commodities are forever spiralling.  except for the rich and relatively rich, life is harsh, the living a struggle to make ends meet for millions, esp the ones with families, children, to feed, clothe, shelter, and send to school.

life is harsh, the living a struggle, and electricity is the one essential commodity that makes life, the daily grind, bearable.  imagine what life would be like for the masses without electricity.  walang ilaw, walang electric fan, radyo, tv, walang pang-charge ng celfone, (and for the middle class) walang fridge, computer, internet, oven, toaster, plancha, washing machine.  ang dilim.  ang lungkot.  ang bigat.

we won’t die without electricity the way we would die without food and water, but it would be a kind of death, it would be the pits, and many already beg, steal, or borrow, ‘wag lang maputulan ng koryente.  no wonder at all that the news of a php 4.15 (!) price hike, no matter if temporary (malaking IF), no matter if utay-utay ang singil, is driving the masses to tearful, and fearful, desperation.  paano na.  tipid na tipid na nga.  wala nang ihihigpit ang sinturon.

unless the president and the lawmakers get their act together on the EPIRA and bring down the power rate to truly reasonable levels, millions of poor pinoys in the very near future would have to do with even less food and less utilities, maybe no radio, no tv – no entertainment, no escape! – just to keep up payments for a little light, shore up what little dignity they have left, as they struggle, kahig-tuka, to keep body and soul together.

beware the social volcano.


10 years of EPIRA: what went wrong?
The curious case of NAPOCOR debts
Power lords
ADB : Anti-Development Bank


EPIRA, epic fail

i’ve long been wondering about EPIRA or the Electric Power Industry Reform Act of 2001 that was enacted by congress supposedly to cut high power costs by privatizing the mismanaged and debt-ridden napocor.  obviously EPIRA hasn’t worked, doesn’t work.  read this from philstar‘s marichu villanueva, Thanks, P-Noy, for saying no to emergency powers and an appeal that he revisit EPIRA in the face of impending increases  in power rates.

The other day it was reported the Energy Regulatory Commission (ERC) has approved on March 26 the pending rate adjustment petitions by Napocor and the PSALM to enable them to recover costs incurred from 2007 to 2010. Based on the ERC decision, electricity rates for Luzon are up by 69.04 centavos per kilowatt-hour (kwh); Visayas, 60.60 centavos per kwh; and Mindanao, 4.42 centavos per kwh effective this May.

Speaking of ERC, the EPIRA authorized it to determine the universal charge. This gave distribution utilities like Meralco and Napocor the right to pass on the burden of paying for stranded costs under the IPP contracts to consumers.

Thus, more than a decade after its passage into law, EPIRA is obviously no cure-all to the problems of stable and affordable supply of electric power in our country. That is why there have been persistent calls to amend the EPIRA to correct the flaws of this law to really achieve its mandate to bring down the cost of electricity in our country, which is the highest in this part of the world.

Congress giving him emergency powers will not solve it. Let’s face it. Legislators will always try to suit their own selfish interests into the laws they craft.

indeed, there’s no counting on legislators to help us out here.  senator serge osmena‘s briefer on the mindanao power crisis simply sounds so complicit to me, as though everything’s as it should be in luzon and the visayas, as if spiralling costs to make power oligarchs happy, never mind the suffering middle-class and the masses, were not a form of corruption, too, and we’re not even talking VAT yet.  read this from tribune.  the history, the rumors of lagayan, the scam…

Serge’s Epira contradictions
Herman Tiu Laurel

The electricity spaghetti hit the ceiling fan last week, and the stench of the power oligarchs reeks all over the place. Now it’s not just electricity consumers charging the oligarchs and their captive government officials with conspiracy; local officials, such as North Cotabato Gov. Emilou Taliño-Mendoza and General Santos City Mayor Darlene Antonino-Custodio, are saying that the Mindanao power crisis is “intentional.” Even Sen. Koko Pimentel openly agrees with Mindanao Development Authority (MinDA) Chairman Lualhati Antonino’s assertion that the “artificial shortage” is the National Grid Corp. of the Philippines’ (NGCP) means to “have the Agus-Pulangi Power Plant privatized.”

The NGCP is by no means the main culprit. It goes way up to the oligarchy and the international corporatist mafia behind it. We must remember that the NGCP Frankenstein was sewn together by Fidel Ramos’ Monte Oro Corp., with the Carlyle Group catalyzing the entry of the State Grid Corp. of China, together with the Sy Group, to become the NGCP.

Monstrous as it became, the NGCP Frankenstein is but the son. The mother Frankenstein is the Electric Power Industry Reform Act (Epira), which, in its time, was sewn together by the International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), the illegal Gloria Arroyo regime, the oligarchs and their Yellow “civil society,” together with the corrupt 12th Congress of Edsa II. They managed to use the thread of the ADB’s $900-million power sector loan and the IMF-WB’s $300-million rehabilitation loan release as conditions for the enactment of the Epira into law.

The local power oligarchs were also alleged to have contributed to a payola of P500,000 for every member of Congress under Speaker Sonny Belmonte, which emoluments were further spruced up by Gloria’s P10-million per congressman “O, Ilaw” project. And, like the current railroaded Corona “Articles of Impeachment,” it is doubtful that even half-a-dozen of the representatives or senators who signed the Epira even read it.

As for media, the oligarch-controlled “presstitute” (press-prostitute) merely suppressed the truth. Only a few, like this columnist and the Freedom from Debt Coalition (FDC), campaigned in the streets against it.

The argument for Epira was that the monopoly enjoyed by the government’s National Power Corp. (Napocor) was too big to be efficient and had to be broken up into smaller units. Fast forward to today and the chairman of the Senate energy committee, Serge Osmeña, himself a champion of the Epira, now argues for the expansion of the split-up units.

In his defense of Department of Energy (DoE) Secretary Rene Almendras’ disastrous handling of the Mindanao power crisis, Osmeña claims the Energy chief “is aware of economies of scale and that electricity would be cheaper for everyone if distributed over a bigger transmission grid than a smaller one…”

The shift in tone is obviously because much of the elite — a class to which Osmeña belongs — have already formed an oligopoly in the sector and are using their clout to blackmail the entire nation into swallowing the “highest power cost in Asia.”

Osmeña says, “The national reform policy on electricity… was to harness the finances and management talents of the private sector in ensuring that the country would be supplied in a timely manner with dependable, quality and reasonably priced power…” Really?

Independent power producers (IPP) are private utility companies established on the basis of state “sovereign guarantees” and/or securitization of captive consumers’ aggregate payments in a contract period. Here, securitization comes in “the form of financial instruments used to obtain funds from… investors… backed by amortizing cash flows.” These cash flows, in turn, are derived from the pockets of millions of electricity consumers.

Historically, securitization was done by the Republic of the Philippines to launch the Napocor; and as government did not shell out any money, only acting as an intermediary of the funds from power consumers, we can say that the power sector was never (repeat, NEVER) subsidized.

When the state’s power assets were still under Napocor control, the price of electricity in the Philippines was not only competitive but one of the lowest in Asia. Today, after Epira, power costs in this country have shot up way into the stratosphere.

In the case of Mindanao, we now see the IPPs blackmailing consumers, the way the privatized Aboitiz Group Power Barges 117 and 118 and the now Lopez-run Mt. Apo Geothermal are being used to force Mindanaoans into accepting 20-year, exorbitantly priced contracts, or else continue being denied much-needed electricity.

But wait. Isn’t price a reflection of these privateers’ much-vaunted “efficiency?” If so, aren’t they and other utilities like the Manila Electric Co. (Meralco) guilty of doing their jobs at a very high cost to the nation and, in fact, destroying its entire economy?

Therefore, given that these oligarchs are only “efficient” from the point of view of profit extraction, totally missing the mark of providing efficient and reliable electricity at the least cost to consumers, why should we accept any of this, in view of the fact that things have gone from bad to worse despite 90 percent of the power sector being privatized?

As if to further cover up the litany of lies that is the Epira, Osmeña raises another point, saying that “Napocor was bankrupt and that even if it sold all of its assets, it still could not cover its liabilities.”

Napocor was a very healthy and viable public corporation before Corazon Aquino, her Yellow gang, and her oligarch-patrons took over the reins of the Philippine Republic. They abolished the Ministry of Energy and placed its functions under the Office of the President to ensure an efficient dismantling of the nation’s energy development program. They established almost a dozen IPPs and cancelled half a dozen major energy projects (including the Bataan Nuclear Power Plant). All these led to a “Dark Age” under a Cory-appointed oligarch as Napocor head. What followed during the Ramos era were 43 more plundering IPP contracts that were to be the most massive bloodletting of Napocor’s resources to this day — via the $18-billion so-called stranded debts that Epira was supposed to have erased but never did. All these have transpired while the oligarchs have not paid $10 billion of what they owe government for these privatized assets.

The current Speaker, Sonny Belmonte, when pressed for a response to the crescendo of complaints from Mindanao lawmakers, said, “We have to investigate (the power crisis) to know what is going on.” Let’s see when the investigation will start and how far it will go (considering who the distribution source of the Epira payola in 2001 really is).

Still, on a slightly positive note, despite the elder Sen. Nene Pimentel’s signing of the Epira, we are hopeful that the younger Pimentel will take up the energy cause in the Upper Chamber this time. My only criticism is that he may have weakened his position when he stated, “If I need to personally beg to Senator Osmeña to hold the inquiry before the Holy Week break, I will have to.”

Why even beg, Koko? Your duty lies with the people and no one else.