Power Struggle

Power bills, at present, can easily take up more than a tenth of one’s monthly income; or more, in the case of low-income families. Considering the difficulty of life in the Philippines these days, with the required daily cost of living at P546 and the ordinary worker or employee earning only P250 a day, the power bill is a great burden on the common people—which it should not be. The exorbitant power rates are exacerbating the misery of the people.

By Alexander Martin Remollino
Bulatlat.com

In many schools throughout the country, students are given glimpses into the world of business. While these glimpses - being glimpses - are not really enough to make them see the business field thoroughly, these give them basic ideas about how business works.

In these glimpses into the world of business, students are taught that the businessman invests money in order to get an enterprise started, and exerts the best efforts to satisfy the recipients of the goods or services it offers so that the money he invested could be returned in the form of profits, which are supposed to go back to the business to keep it going.

But the Manila Electric Company (Meralco) has changed all that.

A deluge of charges

In the early days of the Electric Power Industry Reform Act, which was signed by President Gloria Macapagal-Arroyo last year, it was only the Purchased Power Adjustment power consumers had to put up with. This was payment for electricity Meralco purchased from independent power producers (IPPs). The charge was imposed on all power consumers—never mind if they never used much of the power purchased from IPPs. The inflated power bills escalated the blood pressure of power consumers.

Nowhere can the PPA be found in the new electric bill. But in its place is an avalanche of charges that have nothing to do with our actual consumption of electricity.

First, there is the generation charge. This is the cost of the electricity purchased by Meralco from Napocor (currently in the process of privatization) and several IPPs. Power consumers are being made to pay for all electricity Meralco purchased—including that they never used.

There is the transmission charge. It is the cost of transmitting the electricity from the IPPs’ generating plants to Meralco’s Metro Manila distribution system.

We have the distribution charge. It is the cost of building, operating, and maintaining Meralco’s distribution system.

There is a systems loss charge. This is the cost of electricity lost either while passing through distribution equipment and wires or through pilferage. Consumers are being made to pay for electricity they never see – or for a supposed crime they never committed.

The metering charge is the cost of installing, operating, and maintaining metering facilities, as well as reading them. Why are customers being made to pay for applications for connection then?

The supply charge is the cost of rendering supply to power consumers—billing, collection, customer assistance, and similar processes.

There is the lifeline rate subsidy charge. Through this, consumers are being made to pay for the subsidized rates given to fellow subscribers who cannot pay the full cost.

The interclass subsidy is an amount imposed on industrial and commercial consumers and other subsidizing customer sectors to reduce the power rates of residential consumers, government hospitals, and street lights.

The currency exchange rate adjustment charge is an adjustment based on fluctuations in the peso-dollar exchange rate.

Under the franchise taxes (national and local), Meralco passes on to consumers its franchise tax obligations.

The universal charges are mechanisms by which Meralco passes on the burden of its debts and contract costs to power consumers.

Power consumers are precisely consumers. They are there only to make use of whatever electricity is available courtesy of the power company, and pay for the power they utilize. The earnings derived from their payments should be reinvested to cover the costs of operations, maintenance and other company obligations so that Meralco could continue rendering service.

But power consumers are being made to pay for the power they consume – and do not actually consume - and a host of so many other things which it is the company’s job to shoulder. This is no different from forcing a restaurant customer to pay for the food he ate as well as the operational and maintenance costs from running the restaurant, not to mention the restaurant owner’s debts.

Power bills, at present, can easily take up more than a tenth of one’s monthly income. Considering the difficulty of life in the Philippines these days, with the required daily cost of living at P546 and the ordinary worker or employee earning only P250 a day, the power bill is a great burden on the common people—which it should not be. The exorbitant power rates are exacerbating the misery of the people.

Underpaid?

In contrast, the top officials of Meralco are enjoying a life of unimaginable luxury—at the expense of the people, as the group People Opposed to Warrantless Rates Increase said. Each of them receives no less than a million in wages and bonuses each year.

Jesus P. Francisco, president and chief operations officer, received in 2002 a total salary of P13,720,032 and a bonus of P4,946,679—coming up to a total compensation of P18,666,711.

Daniel D. Tagaza, senior vice president, received in 2001 a total salary of P13,542,626 and a bonus of P5,362,282—adding up to a total compensation of P18,904,908.

All officers and directors as a group received a total compensation of P29,995,292—with a total salary of  P22,205,040 and a total bonus of P7,790,252—in 2002.

No figures are available for the total compensation of Manuel M. Lopez, chairman and chief executive officer; and Rafael L. Andrada and Leonisa C. de la Llana, vice presidents.

By Francisco’s own estimates, Meralco’s top officials earned an average of P3,700,000 in 2002. For each of the 365 days of 2002, they earned an average of P10,137.

And the wonder of it all is that Francisco was able to find it in himself to say, jokingly, that if their total earnings were computed it may even turn out they are “underpaid.”

Bizarre

This is a bizarre case in which a company keeps itself running very smoothly at no cost to itself, while the recipients of its services can barely keep themselves afloat in a flood of charges that chew into their very financial lifelines. No wonder Meralco these days seems ever hard-put to defend itself from the wrath of power consumers—even the big ones. Bulatlat.com

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