Moderate profits, power firms urged

By Jess Diaz (The Philippine Star) | Updated December 14, 2013 - 12:00am

MANILA, Philippines - Five giant business groups reportedly controlling 80 percent of the power industry were urged yesterday to moderate their profits for the good of the public by absorbing spikes in electricity rates.

“The industry can well afford to take a slight decrease in profits in the interest of stable electricity prices and the public welfare,” militant party-list group Bayan Muna said.

This developed as Speaker Feliciano Belmonte Jr. pushed for a review of the Electric Power Industry Reform Act (EPIRA) of 2001 to determine “if it is really working to promote competition.”

He said yesterday that a review of the law “is something that we should be doing” in light of the rising cost of electricity.

“Has it really resulted into genuine competition that would supposedly lower costs and so forth? That’s the whole aspect that needs to be reviewed,” he said.

Bayan Muna identified the firms as San Miguel Corp., which it said accounts for 22 percent of the industry, Aboitiz group (20 percent), Lopez group (18 percent), Ty group (12 percent), and Consunji group (eight percent).

Bayan Muna said the five corporations have been enjoying a profit margin of at least 15 percent since 1998 and can well afford to take some losses.

The militant group also chided Energy Secretary Jericho Petilla for belittling the impact of the high power rate increase on the public, saying he should be protecting the interest of the people instead of defending power producers.

 Belmonte said it was timely that a congressional inquiry into the P4.15 per kilowatt-hour hike in electricity rates was being made.

“Even now the increases are so big that I think we are justified to find out what is the real reason, what are these power providers who seem to have come in need of repair all at the same time,” he said.

“Could we not have anticipated it a few months ago and already prepared the public mind, and not in the middle of problems with respect to Yolanda, and you drop a bombshell like this,” the Speaker said.

He was referring to the “forced shutdown” of some power plants, which coincided with the scheduled maintenance shutdown of the Malampaya natural gas facilities.

Quezon City Rep. Winston Castelo, for his part, said he is seeking the creation of a joint executive-legislative commission to look into the electricity power rate structure and the EPIRA.

He said Congress enacted the EPIRA mainly to reduce the cost of electricity in the country. The result was the opposite, however, with the country’s power cost now said to be higher than Japan’s.

“We can’t expect to sustain higher economic growth as long as exorbitant power rates continue to stifle our people and the private sector,” Castelo said.

The proposed joint commission may also take a look into the reported “price fixing” of power rates and other forms of “market abuse” by players in the energy sector, he said.

Let Palace step in

For Sen. Jinggoy Estrada, it’s now time for Malacañang to intervene in the power rate issue considering its impact on the public.

“I think Malacañang must intervene. Masakit sa mga mahihirap ito (It’s painful to the poor),” Estrada told The STAR.

He did not say what form of intervention the Palace should make. But he said that when his father was president, the latter talked directly with power generation operators to dissuade them from raising rates.

Estrada said Palace intervention is the most viable option if no individual or groups challenge the impending rate increase before the courts, he said.

Sen. Francis Escudero, finance committee chairman, earlier said a temporary restraining order (TRO) from the Supreme Court may be the best way to stop Meralco from implementing the coming rate increase.

Even if the Supreme Court is on a break, Escudero said Chief Justice Ma. Lourdes Sereno can act on her own and issue a TRO once a petition is filed. The SC can just formally approve such TRO by January.

An investigation into alleged collusion among power firms to jack up power cost is also being proposed by Sen. Juan Victor Ejercito.

Ejercito, chairman of the Senate committee on economic affairs, said the scheduled Malampaya shutdown could be just a ploy to cover up possible anomalies in the simultaneous forced shutdown of other power facilities.

“The Senate inquiry should be conducted to protect the consumers from the abuse of big businesses,” Ejercito said in a statement.

Ejercito said both the Department of Energy and the Energy Regulatory Commission (ERC) should be made to explain their alleged failure to cushion the impact of the shutdown of major power plants.

‘Point of concern’

At Malacañang, deputy presidential spokesperson Abigail Valte said that while the outrage against the impending rate hike was not directed at President Aquino, it’s a “point of concern” for him nevertheless.

“Obviously, it’s a point of concern that these things are happening at a particular subset of time, which is why the President has also given specific instructions on how to go about these issues that are being confronted,” she said.

“There are discussions in place. We are aware that there is a possibility of an effect down the line and these will be shouldered by the end users,” Valte said, referring to the P4.16 per kwh Meralco rate increase.

“It’s a point of concern which is why the President has instructed Cabinet men to find ways to cushion the effects (of power hikes). These are important issues that need to be looked at. Rest assured Cabinet secretaries are giving it attention,” she said.

Meanwhile, members of consumer group #StrikeTheHike staged a rally against the power rate increase outside the EDSA-Kamuning branch of Meralco.

“The consecutive increases of prices of our basic products, services and utilities seem like bad luck that will make our Christmas and New Year welcome darker,” said Jinky Panganiban, spokesperson of #StrikeTheHike network.

“We cannot accept such increases that the Aquino government is giving us like Christmas presents,” she said.

The group said the sharp rise in electricity rates is likely to push up the prices of basic goods and services.

“Our protests against price hikes know no holidays. President Aquino as well as concerned government departments and private corporations handling basic commodities and services must brace themselves for a series of intensified protests in the days to come,” Panganiban said. – With Paolo Romero, Delon Porcalla, Reinir Padua, Christina Mendez   source