Power
Consumers ‘Electrocuted’ with False Promise, New Rate Hikes
During
the February-May campaign period, President Gloria Macapagal-Arroyo promised
power consumers the lowest electricity rates in Southeast Asia. But with the
impending increases in Meralco rates and Napocor generating charges, and the
forthcoming removal of the inter-class cross subsidy, power consumers might as
well consider themselves nakuryente, a vernacular slang term meaning
fooled.
BY
ALEXANDER MARTIN REMOLLINO
Bulatlat.com
With
the impending increase of Php0.1327 ($0.0024 based on a $1:Php56 exchange rate)
per kilowatt hour (kwh) in the rates of the Manila Electric Company (Meralco),
which is to take effect in July, consumer and militant groups are expected to
demand that President Gloria Macapagal-Arroyo – whom her K-4 Coalition and
even the Commission on Elections have pronounced as the winner in the May 10
elections even before the canvassing of votes could be concluded – deliver on
her campaign promise to make Philippine power rates the lowest in Southeast
Asia.
As
of mid-2003, it is Laos that enjoys the lowest Southeast Asian power rates,
averaging the equivalent of Php1.54 ($0.03)/kwh. This is Php4.46 ($0.08) lower
than that of the average for the Philippines, which amounts to Php6 or $0.11/kwh.
Power
rate increases resulting from the implementation of the Electric Power Industry
Reform Act (EPIRA) in 2001 became causes for public grievances against the
Arroyo administration, which was installed through a popular uprising in January
that year. During the last election campaign period, Arroyo promised to make
Philippine power rates the lowest in Southeast Asia.
Higher
bill
But
the impending Meralco rate increase, which is to take effect next month, is
proving that promises are made to be broken.
Meralco,
citing as basis an earlier hike in the National Power Corporation’s (Napocor’s)
generation charge covering November 2003 to January 2004, petitioned for a
Php0.2778 ($0.005)/kwh increase. The ERC approved a Php0.1327/kwh hike.
The
June Meralco bill indicates a charge of Php3.1886 ($2.4141)/kwh. Starting next
month, it will increase by Php0.1327 ($0.0024)/kwh.
So
if a Meralco customer uses 200 kwh/month, he or she will be paying Php26.54
($0.4739) more for that alone, come July. If the consumer, for instance, uses
225 kwh and pays Php1,308.45 ($23.36) for May-June, he or she will be paying
Php1,338.31 ($23.90) next month.
(De)generation
charge
The
consumer’s burden will be further exacerbated by the ERC’s approval of
Napocor’s new generation charge, announced in a statement on June 10.
According
to the statement, “The change in generation rates was triggered by upward
adjustment in fuel prices and the deterioration of the value of the Philippine
peso against the U.S. dollar.”
The
new generation charges are as follows:
Luzon
– Php 2.2802 ($0.0407) from Php2.1435 ($0.0382)/kwh or a 30.72-percent
increase;
Visayas
– Php2.5238 ($0.0451) from Php2.2907 ($0.0409)/kwh or a 10.17-percent
increase;
Mindanao
– Php1.5101 ($0.0269) from Php1.1283 ($0.0201)/kwh or a 33.88-percent
increase.
The
change is to take effect with Napocor’s May 26-June 25, 2004 billing. This
means that a consumer using 200 kwh a month will be paying an additional
Php131.70 ($2.32) in July, if he or she is in Luzon.
Adding
the extra Php26.54 that the consumer will have to pay when Meralco’s rate
increase is implemented, we get a total of Php158.24 ($2.826).
Thus,
the consumer who uses 225 kwh and pays Php1,308.45 for May-June will be paying a
total new fee of Php1,466.69 ($26.19).
More
bad news: subsidy removal
Apart
from these, the ERC has also recently announced in its website that it has
“completed the evaluation of applications for the removal of inter-class cross
subsidies.”
At
present, consumers using 100 kwh and less receive the following discounts: 50
percent for 1-50 kwh consumers, 35 percent for 51-70 kwh consumers, and 20
percent for 71-100 kwh consumers. The discounts apply to the generation, system
loss, distribution, metering, and supply charges – collectively known by the
term lifetime rate subsidy.
The
removal of the inter-class cross subsidy will eliminate these discounts.
Those
using more than 100 kwh/month pay an additional Php0.0761 ($0.0136)/kwh used to
subsidize those consuming less than 100 kwh/month. They also receive a discount
of Php0.7130 ($0.0127)/kwh, which is paid for by collecting from commercial and
industrial consumers.
When
the inter-class cross-subsidies are removed, those using more than 100 kwh/month
would no longer have to pay the Php0.0761/kwh, but they would also lose the
Php0.7130/kwh subsidy. So their power rates increase by Php0.6369 ($0.0113)/kwh.
Which
means that our 200 kwh/month consumer would be paying an additional Php127.38
($2.2746). One who uses 225 kwh and pays the new total rate of Php1,466.69 will
be burdened with a total of Php1,594.07 ($28.47) bill.
The
winners
Who
will benefit the most from these new rates? The commercial and industrial
consumers, according to the broad-based People Opposed to Warrantless
Electricity Rates Increases (POWER).
POWER
said that industrial and commercials users are presently charged PhP .0761 per
kwh to subsidize lifeline consumers. They are also charged the following amounts
to subsidize the residential consumers using more than 100 kwh, as well as
government hospitals and street lights:
·
Commercial consumers
– Php0.57 –0.78 ($0.0102)/kwh
·
Industrial consumers
– Php0.08-0.63 ($0.0014-0.0112)/kwh
Once
the interclass subsidies are removed, the above consumer categories would no
longer apply. ERC and Malacañang reason that this would enable businesses to be
more competitive.
As
regards the loan condonation, it is the 119 electric cooperatives in the
Philippines which will emerge as the winners. According to POWER, the billion of
pesos in these cooperatives’ debts will be condoned but absorbed by the
government, meaning that taxpayers will eventually shoulder the weight of these.
This would negate the reduction of power rates that the loan condonation will
bring about.
“Refund,”
and then some
In
a move that Engr. Ramon Ramirez of POWER interprets as intending “to titillate
the consumers and reduce their anger over the twin increases in their July power
bill,” the ERC also recently announced that Meralco will have to refund some
Php13 billion ($232.14 million) in meter and service deposits. This announcement
came following the ERC’s recent approval of the Magna Carta for Residential
Electricity Consumers.
The
Magna Carta, among others, provides that consumers will be exempted from payment
of meter deposits and entitled to the refund of bill deposits, so long as they
pay their bills on or before their due dates.
But
in the June 12 issue of the Philippine Daily Inquirer, ERC chairman
Rodolfo Albano is quoted as saying that: “To be exact in the provision of the
Magna Carta, there is nothing to talk of a refund. What the Magna Carta says is
that new connections would no longer pay meter deposits.”
Albano
was also cited as saying that the ERC is still studying whether to order Meralco
to make the refunds, because the agency would still have to set the guidelines.
So
there is no mention of a refund now. With this and the other impending increases
in their electric bills, power consumers would do well to consider themselves,
in Filipino vernacular slang, nakuryente – in other words, taken for a
ride. Bulatlat.com
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