Gov’t should take over public utilities


WE, from Panay Consumer’s Alliance (PCA), stand firm in opposing the privatization of the power industry in the country. As a public utility, power should be owned and controlled by the government to ensure people’s access to it.

In Panay, both private companies, the almost century-old local player Panay Electric Company (PECO) and the newly-favored MORE Power, are trying to appease the public. Both are trying to look good and promises to be of better service than the other.

But PECO has been found to have profited so much from this service. In 2017 PECO was found manipulating consumers’ account and make them pay not just tens, but hundreds of thousands citing previous misreading and miscalculation by its power meter readers. They also even blame “jumper” connections for lost wattage and this is passed on to consumer’s to pay as well.

As a result of public clamor, PECO’s franchise for another 25 years has been stalled at the House while a mining company’s was approved haphazardly.

MORE Power came into the picture as a mining company (More Minerals Corp. or MMC) without any experience in power service or whatsoever. MORE or Monte Oro Resources and Energy Inc. is the mother company of both MMC and MORE Power holding various projects locally and abroad in oil and gas, mining and solid waste management. This is owned by Walter Brown, the same owner of Palm Concepcion Power Corp. (PCPC) operating in Northern Iloilo. Brown partnered with billionaire Enrique Razon, the chairman and CEO of the International Container Terminal Services, Inc. (ICTSI), the Philippine port-handling giant.

The application of MORE Power stunned the public. How on earth would a mining company, with no experience in power service operate and how will the public benefit from it?

The power industry has been deregularized and privatized that its public character has been abandoned by the state. In year 2001, then president Gloria Arroyo passed the Electric Power Industry Reform Act (EPIRA) or Republic Act 9136 deregulating the power industry and privatizing the National Power Corporation (NPC). The EPIRA was passed as a condition for the Philippines loan agreements of $100 M in 2001 and $100 M in 2002 from the International Monetary Fund, Asian Development Bank and Japan Export-Import Bank.

EPIRA promised to lower electric charges, efficient delivery of service and healthy competition. This is the first complete privatization scheme of a power industry in Asia – from generation, transmission, and distribution, all aspects are now run by a private company.

The generation sector is controlled by, among others, by Aboitiz, Lopez, Consunji together with foreign corporations, i.e. AES Corp. (US), SPC Power Corp (Korea). Only three corporations control 52 percent of generation capacity: SMC (20 percent), Lopez (17 percent) and Aboitiz (17 percent). Only 18 percent is controlled by PSALM and six percent by the NPC.

In terms of transmission, the National Grid Corporation of the Philippines holds the operation with the National Transmission Corporation was privatized. It is being owned by the following: Henry Sy (30 percent), China’s State Grid (40 percent) and Calaca High Power Corp. (30 percent).

While the distribution sector is owned by Manny Pangilinan’s Beacon Electric Asset Holdings Inc. (49.96 percent), Cojuangco’s SMC (27.12 percent), and Lopez’s First Philippine Utilities Corporation (3.95 percent).

Along EPIRA is what they called, “unbundling of rates”, which means each and every aspect of the power service is looked into with its corresponding rates or charges. What you pay for your electric bills contains generation charges (47.3 percent), distribution charge (25.8 percent), government taxes (9.6 percent), transmission charge (7.8 percent), universal charge (2.7 percent), systems loss (5.4 percent), and subsidies (1.4 percent).

But did EPIRA make cheap electricity? The answer is NO!

In MERALCO experience in Manila, from 2001 to 2014, the per kilowatt-hour charge rose by 330 percent at P11.45/kWh. Generation charge also rose from P2.39/kWh in 2000 to P4.67 in 2011 (95 percent increase).

A study revealed that the Philippines has the most expensive cost of electricity in the entire Asia. According to the International Energy Consultants, the average retail rate in the country is US$0.181/kWh in October 2010, more expensive than Japan’s US$0.179.

We have the most expensive electric cost because the cost of production and distribution are being passed to the consumers. Only the Philippines has a privatized power industry but without government subsidy.

What also makes the electricity expensive is that the consumers are being charged with high taxes, NPC’s loans and other expenses by distribution utilities through tax, system loss and universal charges.

The deregulation and privatization of the power industry has been proven to benefit only the private sector, raking multibillion profits from a supposed public utility.

The stalling of PECO’s franchise is an initial win for the Ilonggos, but this win may not last long if another private company takes over the power sector.

Thus, we call the Ilonggos to study the impact and effects of the EPIRA law and privatization schemes happening all throughout the country and consider the pushing for a state-sponsored power industry.

We reiterate our call to oppose the renewal of PECO’s franchise for another 25 years and at the same time, we oppose the entry of MORE Power as a new player.

We call on the Iloilo City council to lobby the takeover by the government of the power industry and/or the cooperativization of the local power sector.

We demand the scrapping of RA 9136 or the EPIRA Law which for many years has caused the suffering of the people.

For the immediate relief of our consumers, we demand the scrapping of taxes amounting to 10 percent of the electric bill.

We also call the scrapping of system loss (nine percent) and universal (15 percent) charges in the electric bill. All these could lessen the electricity cost by as much as 30 percent.

We call on the national government to take over public utilities like power as its mandate for the people./PN


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