Wage increase, solar energy pushed to counter high electricity rates

“Filipino workers are burdened by First-World electricity rates and prices and Third-World wages.” – KMU

By MARYA SALAMAT
Bulatlat.com

MANILA—After raking in good profits last year and in the first three quarters of this year –enough for it to raise its profit projection from P12.2-billion ($283 million) last year to P14.5-billion ($337 million) this year – the Manila Electric Co. (Meralco) warned of higher electricity rates this month. The country’s biggest power distributor cited as reason the higher cost of generated electricity it is buying from different power producers.

As expected, the announcement of rate hike was greeted by collective groans and complaints. The announced P0.44 hike per kilowatt in electricity rates will further increase rates in the Philippines, which the Australia-based International Energy Standards had already described last year as the highest in Asia.

In a statement, the progressive labor center Kilusang Mayo Uno (KMU) said they are opposed to the power rate hike. They asked the Aquino government to stop Meralco from further hiking the already high power rates, and to increase, instead, the wage levels in the Philippines, which have been recorded as one of the lowest in the world.

Even before this rate hike, KMU estimated that in the National Capital Region where the “deficient” wages are relatively higher compared to other regions, a minimum wage earner spends no less than 10-percent of his or her monthly income on electricity bills alone.

“Filipino workers are burdened by First-World electricity rates and prices and Third-World wages,” said Roger Soluta, KMU secretary-general. The impending rate hike will add P44 ($1.02) more to the bill of households consuming 100 kWh per month, and P88 ($2.04) for those consuming 200 kWh per month. These are “too burdensome for workers earning the minimum wage and those earning even less,” said Soluta.

The labor group has been pushing for a P125 ($2.91) nationwide wage hike for a decade now, to help families defray the increasing cost of living. But every year, the government has merely tasked the regional wage boards to deliberate and decide on the amounts of wage hikes. Every time, though, all labor groups in the country condemn the regional wage hikes as too paltry.

On top of the increases in toll fees, transport fares due to continued oil price hikes, this latest power rate increase will further lessen the real value of workers’ wages in the country, said the KMU. The labor group scored the “capitalists in power” and likened them to a hostage-taker “taking advantage” of the consumers’ need for electricity.

Giants in privatized public utilities

Based on reports, the Meralco franchise covers more than 55 percent of the Philippines’ GDP (Gross Domestic Product), and the company has just vowed to expand it further. Since it changed hands from the Lopez family who also operates power generating plants to Metro Pacific Investments Corp. (MPIC) led by Manny V. Pangilinan, Meralco has lately claimed powerlessness over rate hikes. It cites the fact that it sources its electricity requirements from the electricity spot market, state-run National Power Corp., and independent power producers.

But as with many privatized utilities in the country, Filipino consumers are just being charged various “unbundled” items in their bills, of which 58-percent are said to be generation charges. The consumers and the government have little to no oversight in the unbundled components of their electric bill nor in the power rate contracts entered into by Meralco and power producers. Unfortunately, past disclosures of progressive union members, including those who had been laid off for having participated in strikes in Meralco, had called attention to various irregularities here.

Meralco’s muscle for “hostage-taking” appear in the process of gaining strength, as it is now looking also to further spread its power over the country’s power sector. Aside from expanding its franchise coverage, it plans to spend as much as $2.3 billion (about P103 billion) to complete its planned power generation portfolio between now and 2016. This is, on top of the fact that the key stakeholder of Meralco, the Metro Pacific Investment Corp., the local arm of Hong Kong’s First Pacific Co. Ltd. which also controls the Philippine Long Distance Company, Smart, Talk & Text and SunCellular and TV5, also has controlling stake in some of the country’s toll roads and hospitals.

Whatever happened to renewable energy?

Bayan Muna Partylist Rep. Teddy Casiño urged the energy department to provide strategic solutions to the rising cost of electricity. He called on the Aquino government to speed up the implementation of the solar rooftop program.

The solar rooftop program gives immediate solution to rising electricity rates; it will allow factories and small businesses to produce their own power, said Rep. Casiño. “No other technology gives the commercial and industrial electricity consumers the power to build renewable energy systems on the roofs of their establishments or factories and produce their own power,” he added.

As of today, Casiño noted, all other renewable energy sources do not have modular systems like solar technology. This modular system “allows businesses and factory operators to enjoy the opportunity of avoiding the expensive and volatile pass-through generation charges.”

The expensive fossil fuel used in generating power was cited as the reason for Meralco’s rate hike this month, as the WESM price spiked to P30/kwh ($0.70). Rep. Casiño said it is “almost double” the proposed feed-in tariff for solar which is about P17.95/kwh ($0.42), that is why it is ironic, he added, that the energy department “continues to allege that solar is expensive.”

Instead of pushing for the wider use of solar energy, the energy department has put a cap on solar installation to just 50mW, down from the original target of 100mW.

According to Casiño, “the cap placed on solar installation violates the 2008 Renewable Energy Law because it discriminates against a particular technology from among the renewable mix, and limits solar as a possible solution to lowering electricity rates.”

Businesses have repeatedly complained about the high electricity rates in the Philippines. But the Department of Energy “refuses to see the opportunities offered by solar technology to businesses,” said Casiño. He accused the energy department as “blinded and cannot appreciate the massive rooftops in the industrial zones that can house hundreds of solar panels which in turn, can generate megawatt of power.”

“Solar technology promises to cut as much as 30 percent of our electricity bills,” Casiño explained. He added that “In less than a week, a mall or a small factory, can install solar energy systems in their roofs, produce their own electricity, and avoid the pass-through generation charges. But, to achieve this, the government needs to support solar energy, not push it aside.”

Casiño reminded the government that it is mandated to put all renewables including solar energy in the same starting line. He said any technology that weans consumers away from volatile fossil fuel prices and makes commercial and industrial customers independent from rising electricity prices caused by expensive diesel should be encouraged, not set aside. That is, “if the Aquino government really wants to lessen the burden to consumers.”