POSTSCRIPT / April 15, 2007 / Sunday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Harassed electricity users recall Enrile poll promise

CEBU CITY — An observation from reader Alfredo Calayag reacting to a discourse of Chief Justice Reynato S. Puno (quoted in Postscript ) on the tension between basic human freedoms and national security:

“Presumably unaware of Bible prophecies, Chief Justice Puno has quoted words similar to the coming apostasy headed by the Anti-Christ. He said, ‘the tragedy is that they are taking our freedoms on the pretext of giving us peace, the irony is that they are asking our freedoms to be sacrificed allegedly to bring us progress.’

“Could this be far from ‘through cunning he shall cause deceit to prosper under his rule; he shall exalt himself in his heart, and by peace he shall destroy many.’ (Daniel 8:25). The stage is being set in our lifetime and Justice Puno can see it coming.”

(I’m quite certain that CJ Puno, who is a lay preacher of the United Methodist Church, is familiar with the biblical verse cited. — fdp)

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PAGING JPE: During the 2004 election campaign, then senatorial candidate Juan Ponce Enrile promised to take up the cudgels for electricity users who are victims of monopolistic and avaricious power rates.

If the senator is around, he might want to do something about captive consumers reeling from iniquitous power rates that stay high despite gargantuan gains being made by the National Power Corp.

Napocor has admitted in a lengthy article in PhilSTAR that there is indeed a delay of more than a year in the recovery of gains made from the appreciation of the peso against foreign currencies.

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BIG DELAY: Napocor merely confirmed in its article what we have been saying all along — that it has been withholding from electricity consumers, we say unfairly, foreign exchange gains it made in 2005.

While it may be true that Napocor has to ask the Energy Regulatory Commission for approval before any rate reduction is made, the nagging question is why Napocor deliberately delayed its application for rate reduction.

ERC Chairman Rodolfo B. Albano has been quoted as saying that although Napocor had asked for a rate reduction of only 31 centavos per kilowatt-hour, consumers deserve as much as P2/kwh, or an average of P400 reduction in their monthly bill.

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AUTO-ADJUSTMENT: Napocor is taking advantage of the fact that although the ERC can approve or disapprove its rate application, it cannot order the state firm to give consumers a rate reduction bigger than that applied for.

There should be a provision for automatic rate reduction. Senator Enrile may want to sponsor such a move in Congress or use his influence to push administrative changes at the department level.

For one, the Implementing Rules and Regulations of the Electric Power Industry Reform Act (Epira) should be amended to provide for automatic rate reduction when the peso appreciates against foreign currencies affecting its loans and operations.

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LATE & SMALL: It is unfair for Napocor to pocket foreign exchange savings (which are not profits arising from improved efficiency) by delaying its application and by shaving such gains when translated to rate reduction.

The unfairness of the delay is compounded by the smallness of the reduction applied for, as well as by the turtle-paced hearings and administrative processes that the petitioners, objectors and interveners have to pass through.

It could take months or years for a decision on even a minuscule rate reduction to be reflected on the consumers electricity bills. Napakaliit na, napakatagal pa!

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REIMBURSEMENT: Napocor said that “forex gain or loss is the difference in the peso value of National Power’s foreign exchange obligations, both for loans and for IPP obligations as a result of the movement in the peso-dollar exchange rate at the beginning of the year and the exchange rate at the end of the same year.”

This is misleading, because forex gains do not only refer to gains made by Napocor as a result of the appreciation of the peso with respect to its outstanding loans.

Forex gains, as pointed out by Chairman Albano, are also derived from the appreciation of the peso with respect to its operating and generating expenses and costs.

This can only mean that the forex gains are indeed overcharges being collected from consumers. They should be reimbursed.

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DRAMATIC CUT: Napocor said that forex gains are non-cash as they relate to outstanding loans, and that it does not receive actual cash revenue from them.

Still, it is hard to fathom how or why Napocor cannot convert the same as cash revenue when the gains made are disposable.

It is surprising why Napocor has not asked for a P2/kwh rate reduction when that much has been overdue consumers since 2005.

In its 2005 financial statement, Napocor booked forex gains amounting to P78.742 billion. If that amount is divided by its sales of 33,694 gigawatt-hour (gwh) that year, consumers stand to reap a rate reduction of up to P2.39/kwh.

More reduction should be under way resulting from Napocor’s P90-billion net income in 2006, which is being attributed also to the pesos appreciation.

Is Napocor just holding back for as long as it can (and thus amass savings that should go to consumers) so the Arroyo administration can order a DRAMATIC RATE ROLLBACK timed for the May 14 elections?

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(First published in the Philippine STAR of April 15, 2007)

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