Republic utilities
To the guys down here in my barangay (village), it seemed that the public could hardly count on the beloved government of this corruption-ridden republic for consumer protection.
Well, in the past five years under our leader Benigno Simeon (aka BS), the Palace consistently stayed away from scandalous issues over hefty increases in utility rates, for instance, particularly electric and water bills.
We all knew that, at least in the past 28 years, the water rates in Metro Manila and surrounding areas became rather expensive, all thanks to the privatization of the water service, in which our government handed over the service to Manila Water and Maynilad.
One estimate showed that from the time of privatization, meaning, from 1997 to 2014, the average basic tariff of Maynilad went up by 585 percent, while that of Manila Water went up by 1,120 percent.
In other words, it would rather be difficult to pin the blame for those huge increases in the rate of inflation.
Just look at your water bills, and you would probably find a long list of charges: Basic charge, the FCDA (foreign currency differential adjustment), environmental charge, sewer charge, maintenance service charge, and the ever reliable VAT.
All of a sudden, the water companies that never looked at themselves as “utilities,” demanded that the Aquino (Part II) administration should reimburse them billions upon billions of pesos for what they claimed to be “losses” in their business.
What—despite the scandalous 585 percent and 1,120 percent increases in the water rates?
At the same time, after five years of the Aquino (Part II) administration, this republic could still claim to have the highest electricity rates in the whole of Asia, even some 10 years after the passage of the Epira law that was supposed to bring down the rates.
Now, word recently went around that, soon, the Supreme Court would come out with a definitive ruling on the “collusion” case over the controversial increase in Meralco rates, amount to P4.15 per kilowatt-hour, which happened in December 2013.
There—to decide on this case affecting more than 20 million consumers, it seemed that the Supreme Court would only need about one and a half years.
Anyway, the case actually boiled down to the maintenance shutdown of the Malampaya natural gas facility, which supplied more than 40 percent of the electricity that Meralco distributed to the public.
With the Malampaya shutdown of course came the drop in the supply of power, obviously, which in turn could only drive up prices of power in the open market called WESM.
Distribution utilities such as Meralco naturally had to charge the higher “generation cost” to its costumers.
In fairness to Meralco, the government rules and regulations nevertheless allowed it to charge, right away, even without asking permission first from the government, any increase in generation costs.
The rules said that, as long as the increase involved generation charges, it could be passed on to the customers—automatically.
Besides, the distribution charge of Meralco—or the portion of the bill that went to the company—did not change at all, after it actually went down in June last year.
Still, Meralco was ever the favorite whipping boy of consumer protection groups because it was always Meralco bills that should show all the power rate increases— not the bills of power generation companies.
In the summer season this year, the Malampaya natural gas facility unfortunately also had to undergo maintenance shutdown for one whole month, which again coincided with the maintenance shutdown of other generation plants.
Guess where the electricity prices would tend to go, considering the spike in the demand for power during these hot summer months with air conditioning units blasting.
In the same way, for that matter, electricity rates went down a bit during the holiday season last year because of the lower demand during the cool season of December.
According to Meralco, the Malampaya shutdown (March 15 to April 13) would still affect the bills of its customers in May this year, even as the Malampaya natural gas facility obviously would have been operational
Why? Because the higher costs resulting from the Malampaya shutdown would be distributed in the April and May bills, with the May bill reflecting the higher power costs from the last 19 days of the Malampaya shutdown.
Now, as for the beloved government of this corruption-ridden republic, it was the job of its so-called regulators to verify the computation of the utility rates, which should be the only way to remove suspicion of the public regarding collusion and cheating and all that.
As a matter of fact, public aversion to rate increases actually took its roots in the very same “verification” process—you know, the very same “process” that the Palace boys of our dear leader, BS, insisted should always be left alone.
That was perhaps why the Palace and our dear leader, BS, always maintained this annoying “hands-off” policy regarding rate increases in utilities.
Thus, the bosses of our dear leader, BS, still could boast that this republic still had the highest electricity rate in all of the Asia.
Who knows—maybe someday soon we could also claim to have one of the highest water rates in the world?
