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IF the presidential aspirants are looking for an advocacy that would
endear them to the masses, the ever-shrinking middle class and the
business sector, they should look no further than the issue of the
high cost of electricity in the country.
Access to safe, reliable and, most of all,
affordable, electricity should be regarded as a right, and the
candidate who could do something to help fully enforce this right by
2010 would have my vote and I’m sure the vote of millions of
others.
Johnny Enrile rode the issue of the high
electricity prices all the way to a fresh term in the Senate
(remember his Kontra PPA advocacy?). Well, it’s still very much an
issue and one so hot it can help elect the next president.
The government’s attempt to restructure the
electric service industry through the Electric Power Industry Reform
Act, or Epira of 2002 has so far been a failed experiment.
Epira started the deregulation of the power
industry and the breakup and eventual privatization of state-owned
generation and transmission assets. Under the law, the power plants
and the independent power producer contracts under the National
Power Corporation (Napocor), as well as the transmission assets
under the National Transmission Corporation (Transco) were
transferred to the Power Sector Assets and Liabilities Management
Corporation (Psalm).The Wholesale Electricity Spot Market (WESM) was
also established to achieve greater transparency in the production
and retail selling of electricity.
It has been a failed experiment because for the
vast majority of consumers, Epira has not produced affordable
electricity rates or better consumer choices. The price of
electricity is as high as ever and it only promises to go higher in
the near future. The Philippines is said to be the second country in
the world with the most expensive electricity. The first is Japan.
But recently I’ve read reports in some business papers claiming
electricity here is even higher than Japan’s now.
The largest power distributor in the country,
the Manila Electric Co. or Meralco, which services Metro Manila and
Calabarzon, also has the highest distribution charges among all
the distribution utilities. The Freedom from Debt Coalition, using
the electric bills of consumers as its basis, said Meralco’s
charges are higher by 57.8 percent than the Visayan Electric Co. in
Cebu, and 60 percent higher than the Davao Light and Power Co. in
Davao.
Reading your Meralco electric bill is
confounding in itself. One time, somebody asked me to explain what
all those charges stated on his bill mean. He must have thought that
having a Ph.D. in Public Finance would equip me to do so. Well,
it’s really complicated stuff for anyone and maybe it was meant to
be indecipherable. Reading a Meralco bill hurts your head, not just
your pocket.
What is power deregulation for if it could not
reduce electricity prices? How did Epira save us money? Did it lower
electricity bills? Epira’s promise was “to ensure transparent
and reasonable prices of electricity in a regime of free and fair
competition, and full public accountability to achieve greater
operational and economic efficiency and enhance the competitiveness
of Philippine products in the global market.”
Instead, we have a power sector where regulatory
oversight has been severely weakened. Generation charges and
transmission costs are collected from us without the approval or
scrutiny of the Energy Regulatory Commission. We are automatically
billed for these in our electric bills without us having any say
about it. We the people practically guarantee the windfall of
profits of power generators and distributors because we pay for all
their expenses and losses without us having any stake in their
companies.
There are unparalleled opportunities for
corruption (sweetheart deals between power distributors and their
affiliated IPPs, rigged power privatization bids, etc.) and market
manipulation and discrimination (e.g. the price manipulation raps
filed against Psalm in the operations of the WESM).
We were sold a myth called deregulation and
competition and open access. But these promises of Epira
evangelists, of a competitive, efficient and lower-priced energy
delivery remain just that, a myth.
Now more than ever, power consumers need relief.
Spending on electricity is one of the highest if not the highest as
a share of total consumer spending, and it’s no secret that a lot
of Filipinos cite high electricity prices as a reason why they are
worse off financially. It’s the same for the industrial and
commercial customers who are also complaining. High electricity
prices place the country at a competitive disadvantage and force a
lot of multinational companies and foreign investors to flee to
other countries where electricity is more affordable. Higher
electricity rates therefore eventually lead to a loss of jobs.
This issue is as good as it gets for anybody
wanting to run for president. And the person who can help provide
immediate and real relief from skyrocketing electricity prices is
guaranteed to earn millions of votes.
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