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Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts Vol. IV, No. 31 September 5-11, 2004 Quezon City, Philippines |
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Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts Vol. IV, No. 31 September 5-11, 2004 Quezon City, Philippines |
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Commentary Gov’t
Should Reduce Power Rates, Not Just Give Discounts A
close scrutiny of the discounts on power rates show an ironic situation
where power companies can still earn by appearing to be considerate to the
needs of the poor. BY
GIOVANNI TAPANG The
presidential office tries to project that it is softening the blow of the
hefty power rate increase on the poor through the 50-percent discount on
their rates. With the Malacañang-supported and sponsored rate hike in
generation rates of the National Power Corporation (Napocor) of an average
of P0.9800 per kilowatt-hour ($0.0175/kWh, based on an exchange rate of
P56.09 per US dollar), what the people need are reductions in power rates
and not misleading discounts. The
so-called discount is taken from 65 percent of the customer base and is
not due to the Macapagal-Arroyo administration’s resolve to alleviate
the burden of these power increases. It is more a case of the poor
subsidizing the poorer. Commercial and industrial electric users pass on
the costs of these subsidies as price increases to consumers. The
administration has also failed to tell the people that the pending removal
of inter-class subsidies will result in an increase of P0.7130 per
kilowatt-hour ($0.0127/kWh). In fact, this subsidy scheme becomes a
milking cow for distributors like Meralco because the amount that they
collect is more than the discounts they give. Computing
the costs of these discounts for 2003, the revenue losses of Meralco
amounts to P134,923,561 ($2,405,483). But to recover these losses, Meralco
collects P0.0761 per kilowatt-hour ($0.0014/kWh) from residential and
industrial consumers using 101 kWh and above. Multiplying
the total kWh consumption of these consumers in one month by P0.0761/kWh
($0.0014/kWh), one gets the figure P152,474,582 ($2,718,391). The latter
is P17,551,021 ($312,908) more than Meralco lost from the discount every
month. Computed on a yearly basis, the difference reaches P210,612,252
($3,754,898). At present, consumers using 100 kwh and below get the following discounts:
These
discounts apply to the generation, system loss, distribution, metering and
supply charges. The above is called by its technical term, lifeline rate
subsidy. Those using above 100 kwh presently pay an additional P0.0761/kWh
($0.0014/kWh) that is used to subsidize the lifeline consumers above who
are using less than 100 KWh (which is really a case of one section of
consumers subsidizing another section of the consumers). In
addition, all residential consumers get a discount of P0.7130/kWh
($0.0127/kWh) subsidy paid for by collecting from the commercial and
industrial consumers. This will be removed within three years under the
Electric Power Industry Reform Act or EPIRA. This means an increase of
P0.7130/kWh ($0.0127/kWh) on top of all the recent rate increases. In
this discount scheme, Meralco, Napocor and President Macapagal-Arroyo are
happy since they earn brownie points while hiding the reality that none of
them gave any centavo to alleviate the burden of high power rates. What Malacañang should do is to reduce power rates and grant wage hikes to truly address the concerns of the people. Bulatlat We want to know what you think of this article.
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