Mary Ann LL. Reyes (The Philippine
Star) - June 8, 2016 - 12:00am
On its final days, the Aquino administration,
through the Energy Regulatory Commission (ERC), came out with several issuances
that are deemed to be anti-poor, anti-investment and anti-competition.
The ERC issued several questionable
resolutions on Retail Competition and Open Access (RCOA) in the electricity
market, one of which is Resolution No. 11 which bars distribution utilities
from engaging in the supply of electricity in a “contestable market,” referring
to a group of customers that the ERC has allowed to choose their electricity suppliers.
Meanwhile, ERC resolutions 5 and 10
enumerate the entities that can apply for license as suppliers, and contain
guidelines to determine a “contestable consumer” in the retail electricity
market. (A contestable consumer refers to one with a monthly average peak
demand of at least one megawatt (MW).)
Manila Electric Company (Meralco)
last week asked the court to nullify these ERC resolutions and a
Department of Energy circular supporting these, saying these would discourage
competition and would jack up electricity rates, contrary to the spirit and
intent of the Electric Power Industry Reform Act (EPIRA) to promote free
competition.
Resolution no. 11 also limits retail
electricity suppliers (RESs) to supplying not more than 30 percent of the total
average peak demand in the retail market. In effect, cost-efficient RESs that
offer cheaper electricity prices would be barred from supplying contestable
customers (those consuming at least one MW) once the cap is reached.
Under Resolution No. 11, the ERC set
the dates making it mandatory for electricity customers to be part of the
contestable market. With more customers required to be part of the
contestable market, contestable customers will be at the mercy of suppliers.
The limited availability and capability
of the remaining RESs to serve customers will, therefore, jack up electricity
rates.
Meralco also pointed out in its
petition that the EPIRA Law and its implementing rules allow DUs like Meralco
to engage in the competitive retail electricity market as supplier, even
without ERC approval. This would give consumers more choices in terms of price
and quality of service.
Improved
internet speeds
Just a few days since the Philippine
Long Distance Telephone Co. (PLDT) group and Globe Telecom announced the
acquisition on a 50-50 basis the telecommunications business of San Miguel
Corp. (SMC), already, things are looking up for the quality of Internet service
in this country.
PLDT subsidiary Smart Communications
has announced that it will start using this year the 700 megahertz frequency as
part of the accelerated deployment of its long-term evolution (LTE) service, in
order to more quickly deliver faster, more reliable and affordable internet
services throughout the country.
Officials explained that deploying
LTE on 700 MHz combines a powerful frequency with the most advanced mobile
phone technology. They are also in talks with device manufacturers to make
available more affordable LTE smartphones and tablets using this frequency
soon.
Meanwhile, Globe Telecom last Monday
activated its first cell site supporting the 700 MHz frequency (MHz) which PLDT
and Globe acquired from SMC. Internet speed tests conducted reached as much as
100 mbps near the cell site.
Short-sighted critics say that the
acquisition is bad for the local telecommunications sector since it put an end
to a potential third telco player and that is SMC. They have even asked the
newly created Philippine Competition Commission to immediately review the deal.
But even the just released
implementing rules of Republic Act 10667 or the Philippine Competition Act
recognizes the fact that not all mergers or acquisitions are bad. It said that
even prohibited merger or acquisition agreements (or those that substantially
prevent, restrict, or lessen competition in the Philippines in the relevant
market) may be exempt from prohibition when the concentration has brought about
or is likely to bring about gains in efficiencies that are greater than the
effects of any limitation on competition that result or are likely to result
from the said agreement.
SMC had the chance to become a
viable third player in the telco industry given that it held most of the 700
MHz frequencies for several years now.
SMC held talks with Australia’s
Telstra for a possible telco venture but the talks fizzled out. Possibly left
with no choice, SMC decided to just get out of the telco business.
BDO chief market strategist Jonathan
Ravelas was quoted as saying that SMC’s giving up the telco business was a
master stroke, as it will be getting a large sum (P69 billion) and spare itself
from a bruising fight in an industry that is getting more competitive and
bloodied.
Best
of the best
Now that the dust of the May 9
elections has settled so to speak, the battle has transferred to the halls of the
Senate and the House of Representatives where the leadership of each chamber is
now at stake.
There is a four-cornered fight for
the Senate presidency, with current Senate President Franklin Drilon and
Senators Tito Sotto, Koko Pimentel and Alan Peter Cayetano slugging it out.
Of the four, Cayetano is the best
Senate president for president-elect Rodrigo Duterte. The incoming president
seems to believe so as well.
If there is one person who can help
Duterte achieve his legislative agenda, it would be Cayetano.
Just like Duterte, Cayetano hates
corruption. He fought several big fights against corruption, involving big
names like former first gentleman Mike Arroyo and outgoing Vice President
Jejomar Binay.
But more importantly, his loyalty to
Duterte is beyond question. He supported Duterte from the beginning and never
waivered in his support, even when the going was tough.
This is the kind of leader in the
Senate that Duterte needs – someone who shares his vision and plans for the
country, someone who has excellent leadership skills, someone who knows how to
push Duterte’s agenda in the Senate, someone who can organize the divergent
opinions and come up with a strong consensus on much-needed measures.
Just like Duterte, Cayetano is known
to be equally strong-willed, independent, and one who delivers on his promises.
Cayetano would have made a great
vice-president for Duterte. At least, he can still be Duterte’s partner for
nation-building if he becomes Senate president.
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