When every now and then, we call the attention of the President to some anomalies happening under the very noses of his Cabinet men, we only are responding to his call to help him curb corruption, incompetence or abuse in government.
We have no intention of diminishing his 91% popularity.
Our sovereign call has always been either favor of farmers and fisherfolk, adversarial matters pertaining to utilities, especially light and water, incompetence or gross negligence grossly disadvantageous to the people, or anything that put national interest in harm’s way.
This piece is about how since President Marcos was removed from office, the consumers has always been at the losing end of the deal, even condemned to shoulder the full capacity of power producers, including the portions it never generated or consumed by the public.
That is tantamount to billing consumers for kilowatts it never used.
This may be a little technical so I advise you read through slowly.
Power industry advocate Romeo L. Junia rallied electricity consumers in the Visayas and the rest of the country to join the Energy Regulatory Commission’s (ERC) virtual hearings on two rate petitions of the National Power Corporation (NPC) on October 8, 2020 at 9:00AM and 2:00PM.
These petitions are (1) Approval of a P20.7B Universal Charge for Missionary Electrification (UCME) for 2021 (ERC Case No. 2020-011RC) and (2) The recovery of an alleged P5.9B 2018 UCME “revenue shortfall” (ERC Case No. 2020-004).
Anyone may be allowed to join by simply sending his email address to firstname.lastname@example.org .
Prevent Power Increases
Romeo L. Junia of the United Filipino Consumers and Commuters (UFCC) said approval of the two petitions could raise the monthly bill of a 200kwh-household by as much as P52.92.
The cost would even be higher when the on-going Automatic Cost Recover Mechanism (ACRM) charge of P0.0219 pkwh is added. The UCME is collected from “all electricity end-users” under Sec. 70 of the Electric Power Industry Reform Act (EPIRA) to pay for the high cost of diesel and bunker fuel plants that supply power to Small Islands and Isolated Grids (SIIG).
UCME was supposed to “be phased out in a period not exceeding three (3) years” under Sec. 74 of EPIRA, with a one-year grace period added.
However, the subsidy thrives 19 years into the power reform law. For the current year, UCME is P0.1561 pkwh. This is about P15.6B on annual energy sales of 100B kwh. However, that is set to increase by 33% next year, to a staggering P20.7B.
“We have to see where that increase will go, let alone ask why that subsidy persists up to the present, in spite of the mandatory phase out under EPIRA,” Junia said.
Situation in Cebu
Junia pointed out that there are two UCME coops with pending rate applications at ERC – Camotes Island Electric Cooperative (CELCO) and Bantayan Island Electric Cooperative (BANELCO).
In the case of CELCO, it is a 15-year Power Supply Agreement (PSA) which Primewater Infrastructure Corp. obtained thru an Unsolicited Proposal. Meanwhile, BANELCO, is a negotiated 12-month Interim Power Supply Agreement (IPSA) with Isla Norte Energy Corp. (INEC). INEC is a subsidiary of the Vivant Consortium that was awarded, separately, a 15-year PSA a year ago, also by BANELCO.
While they may not be emblematic of UCME, they are nonetheless instructive and illustrative of how the subsidy scheme works, Junia explained.
So what DOE is doing?
In 2016, the Department of Energy (DOE) adopted a Missionary Electrification Development Plan (MEDP) to “graduate” these coops from the subsidy regime to commercial viability. Another path is inter-connection so that the coop becomes on-grid, from off-grid.
The policy of ‘tariff differentiation’ where UCME subsidy will be targeted to residential and marginal coop members so that commercial and industrial customers will not be unduly advantaged made so much sense, Junia said, but it has not been implemented.
According to Junia, the ‘graduation’ strategy of MEDP is not evident, at all, in the NPC petitions. In fact, there is no perceptible shift to indigenous fuels that could avoid and minimize the use of expensive and environmentally-critical diesel and bunker fuels, he noted.
Junia emphasized that United Filipino Consumers and Commuters (UFCC) does not oppose the concept of a subsidy or help to bring the unserved or underserved areas to the economic mainstream, and reliable, affordable power supply is key to that.
The cost, however, should be borne not the “electricity end-users” who are already burdened with excessive and outlandish charges under the present rate regime, he said.
Suffice it to say, the subsidy should not be imposed on us, power consumers, but absorbed by the power companies.
Taxes power consumers pay
According to Junia, for every P1,000.00 an electricity consumer pays today, about P100.00 to P110.00 goes to taxes.
Every item is VATted, including the System Loss, senior citizen discount, lifeline rate, ACRM, even the Local Franchise Tax.
Government must undertake countryside electrification so that all Filipinos will get electricity, 24-7. But the cost must be borne by government, not the overbilled and overtaxed consumers, he emphasized.
Junia said, in a 300-kwh household that paid a total of P2,801.00 on which he paid P300.00 in taxes and P55.16 in UCME.
If government heeds our suggestion and pays UCME out of the taxes we ourselves pay, Junia said, government will still have a net tax take of P245.18 for that month, for that account.
“We hope consumers will look closely into the fine print in their monthly power bills. At the household level it’s just a few centavos but in the aggregate, the numbers are staggering.
And as UFCC has shown in helping institutionalize the Competitive Selection Process (CSP) in the landmark Supreme Court decision in May 2019 on Meralco’s Midnight Contracts, consumers can also score winning blows and make a difference, UFCC said.
It is ridiculous that we are talking about this still in the midst of a pandemic.
Please help stop this yet another abuse that we have to live with.
Power producers owe the people trillions of refunds for over-collections since the inception of the EPIRA law which mandates that every four years, provisional price increases should be subjected to reset, review and true-up, in short reconciliations of over-collections as against underpayments.
Four such regulatory periods have already passed, as we are now on the fifth four-year period. Advocates estimate that part of those trillions, Meralco alone, owes no less than P200 billion in refunds.
Ironically the Supreme Court passed a ruling last year mandating the Energy Regulatory Commission to finalize the estimates due the general public, under a landmark ruling indicating that the charges power companies levy on the public must be computed at least cost.
Ironically what is happening now is computations run at the highest possible cost.
Soonest ERC delivers the final figures, I recommend not to anymore refund the consumers as many have already left their meters for the past 16 years, and tracing to whom refunds ought to be paid would be as confusing as returning the coconut levy fund to its original contributors.
The President can leverage this treasure by having government take-over affected power companies, in effect nationalizing the power sector.
Then and only then will public interest be served, over and above that of the oligarchs and the ruling class who have made the industry its milking cow.
Romeo “Butch” Junia may be contacted at 0917-521-5611 or you can email him @email@example.com