• Where the ERC failed

    5

    There is no doubt that the Energy Regulatory Commission (ERC) has failed to protect the Filipino consumer from what is confirmed to be the highest power rate hike ever.

    By their lack of action, the commission showed that the needs of the general public were subordinate to the needs of the power industry.

    Metro Manila residents have reason to believe that ERC chief Zenaida Cruz Ducut was sleeping on her job. After all, they are the ones who will be most affected by the sky-high power rates being dunned on them by the Manila Electric Co. (Meralco).

    As Senator Antonio Trillanes 4th said during the hearing of the Senate committee on power the other day, the ERC head acted as if she were completely powerless to prevent, or at least minimize, the rate hike.

    Any manager of even a small corporation knows where she failed.

    She should have known about the downtime scheduled by the power producers where Meralco buys the power it sells to consumers in the National Capital Region.

    As head of the ERC, Cruz should have kept tabs of the supply of power. She could have required all the power producers to give the ERC their schedule of maintenance and subsequent shutdowns.

    With their schedules, she could have then tweaked them so that there would be no overlapping. Some she could have instructed to conduct maintenance work a few weeks earlier, while others could have been told to do the same a few weeks later.

    This way, the supply would have been assured, and there would have been no need for Meralco to purchase power from the spot market at much higher rates.

    Meralco’s claims that prices would “normalize” after a few months are meaningless to the average Filipino family, who know that they must pay their bloated bill on time or else. That “or else” includes a willingness, nay eagerness, on the part of the sole company allowed to distribute electricity in the metropolis to cut power from households, which dare delay payments of their monthly bills.

    The fat cats who sit on top of the totem pole of both the ERC and Meralco can well afford to pay their monthly electricity bills. The average Metro Manila household might not.

    At the end of the year, Meralco is again expected to show huge profits. That net profit this year will be in the billions, just as it was last year. According to the company itself, they are on track to hit their P17-billion net income target this year.

    That’s right. Billions, not mere millions.

    They may argue that their profitability is the result of highly efficient operations.

    Consumers, on the other hand, can counter that the profits are excessive, to the point of profiteering at the expense of the working class.

    Would it be too much to ask that the company lower its profit target, and to settle for a few hundred millions rather than P17 billion?

    We know their answer to that one. They operate in a free market environment, and nobody is forcing anyone to buy power from them. Clearly they do not understand the concept of a social conscience.

    How unfortunate that with the blessings of the ERC, Metro Manila consumers will be hobbled with huge power bills for the next three months. Or more.

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    5 Comments

    1. The trouble is those sitting in the cabinet were not really qualified to be in their position in the first place if not for who they know in the totem pole. They probably have never managed anything in their lives except for their powerful connections, that is why they are clueless on what their job entails.

    2. Meralco has no right to claim that they operate on a free market!!!!! They have no competitor to speak of!!!! If they earn 17 Billion for the year, that is too much profiteering to a helpless community…

    3. bakit kasi natutulog sa pansitan itong mga kawani ng gobyerno? yung mga nahalal natin nung eleksyon dapat gumagawa din sila ng paraan kasi alam naman nila na mangyayari ito eh. lagi na lang silang huli, gagawa daw ng aksyon eh wala namang nangyayari. nakakalungkot lang.

    4. Channeling Meralco to buy from the pricey WESM might appear like a plausible and reasonable action and this Lopez concern now ran by even a more vicious and ambitious man will get off the hook once again. The crux of the problem is simply baring out the real cost of power generation that involves the big and established players as IPPs, the small players hooked up to the national grid, the hydel (hydro-electric), and the renewable energy players. Feed-in tariff rates have been shoved in to public acceptance without question as the gospel of truths. While fossil derived in- puts are affected by the day-to-day wild swings in Wall Street, nobody has ever raised the question of how or where or from whom these generation charges came out to be. With different sources, there certainly is a need to “levelize” the cost of energy generation whether it is coal fired, gas fired, or generated in “co-generation” set-ups in existing refineries. Wind power contribution to the grid is another source whose cost of generation must be defined just as solar power may also one day play a role in the future. Malampaya is a natural gas source that runs the plants that convert the useful energy, the major costs of the economic venture are now sunk costs that have been spread over and correspondingly depreciated over time. Nobody raised a sneer when it was shut down for scheduled maintenance even as months before that, the consortia have floated the idea of a “major rework that will more than double” original capital outlays of the original venture which has been very profitable as evidenced by the stupendous returns on investments; venture was “on the nose” in making positive contributions toward the energy needs of the economy. But what is the true utility value of venture to PH society? Perhaps, in fairness to those IPPs who risk their necks and capital, a fixed price incentive in MoA might be in order to prevent unjustified price hikes that certainly will moderate the impact on the consumers. When these 3 options are undertaken, the continuing charade at the WESM need not happen anymore.