POSTSCRIPT / October 11, 2012 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Ready to accept pact with MILF, but then…

NO ANNEXES YET: With the debate and the writing of annexes still ongoing, why is Malacañang rushing the signing on Monday of the government’s transition agreement with the Moro Islamic Liberation Front for the creation of an enlarged autonomous Bangsamoro in Mindanao?

The talks with the MILF have been secret. How can there now be informed public discussions involving other stakeholders without the annexes due to be completed only by the end of the year?

Do we just rely on the assurances of Malacañang and the checks along the way that include an enabling legislation by the Congress, a plebiscite in the affected areas, and a possible challenge in the Supreme Court?

The final test, of course, is the actual implementation of the Bangsamoro Organic Act. If it fails, what is the fallback?

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AQUINO CAN DO IT: Before I wrote my previous Postscript on the subject, I reread backgrounders, as well as the Framework Agreement, the speech of President Aquino, the joint communiqué of the parties and the remarks of chief government negotiator Marvic Leonen.

Leonen has convinced me from a distance that it is providential the Bangsamoro will be born during the watch of President Aquino whose only concern is peace and prosperity for the people of Mindanao. If there is anybody who can forge a peace pact, it is Aquino.

We cannot have a perfect pact. What we have now is the best we can have under the complicated circumstances. Since I see no alternative, I am willing to take my chance with it.

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CHARTER CHANGE?: But I am disturbed about some details, including the likely emerging of other Muslim bands making separate demands for recognition, and the unusual interest shown by Malaysia and the United States on what is essentially a domestic problem.

Another point: Despite Leonen’s assurance to the contrary, the need for constitutional amendment may just arise. Do we amend our charter just to accommodate the MILF and its patrons?

Section 4.b of Article VII (Transition and Implementation) of the Framework Agreement says that one function of the Transition Commission is: “To work on proposals to amend the Philippine Constitution for the purpose of accommodating and entrenching in the constitution the agreements of the Parties whenever necessary without derogating from any prior peace agreements.”

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NO CROSS-OWNERSHIP: To protect electricity users, then President Ferdinand Marcos decreed that no one interest group should engage in both power generation and distribution.

That policy removed the Lopez family, then in control of the Manila Electric Co., from the business of generating electricity, and limited it to power distribution. Marcos turned over Meralco to the group of his brother-in-law Benjamin “Kokoy” Romualdez.

This sparse summary is based on memory. We leave it to consumers to judge if the dismantling of the monopolistic setup and the taking over by presidential relatives served the best interest of the general public and Meralco customers in particular.

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POWER CRISIS: After Marcos was deposed and sent packing off to Hawaii in 1986, President Cory Aquino took over and gave back Meralco to the Lopezes.

She mothballed the Bataan nuclear power plant, a Marcos project, without putting up replacement capacity. That contributed to electricity demand outstripping supply.

When a power crisis hit the country in the 1990s, President Fidel Ramos signed up foreign IPPs (Independent Power Producers) with generous incentives that pushed power rates higher.

Encouraging local players, President Erap Estrada later allowed the Lopezes to engage also in generation. President Gloria Arroyo after him sustained the policy of cross-ownership of generation and distribution.

Rebounding, the Lopezes have put up the 100-megawatt Sta. Rita plant in Batangas using natural gas piped in from Malampaya off Palawan, followed by their 500-mw San Lorenzo plant.

* * *

PRICE CONCERNS: At the recent conference on energy organized by the European Chamber of Commerce in the Philippines, a Meralco executive talked about driving efficiency and competitiveness across the industry’s value chain.

Most of the industry major players – in generation, transmission and distribution – participated. The Department of Energy was there to give insights and listen.

In its presentation, Meralco declared its intention to be “part of the solution” in the face of price concerns that have become more pronounced with a looming power supply shortfall.

* * *

SMART GRID: Meralco is pursuing generation initiatives, including a 600-mw coal-fired plant in Subic set to start operations in 2016.

It has sewn up new power supply agreements for close to 2,900 mw, replacing its transition supply contracts expiring this year. These new PSAs, along with bilateral contracts with IPPs, will account for 85 percent of its peak demand.

To help customers manage the way they use electricity, Meralco is coming up with innovations such as the “smart grid,” a new generation network that enhances service reliability.

The intelligent automation system serves as a platform for new services such as prepaid electricity and home area network. Innovations will give customers more flexibility in using their appliances and monitoring consumption.

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HIGH COST: A survey by Dr. John Morris of the International Energy Consultants shows, incidentally, that Meralco’s rates are ninth among 44 markets surveyed – not the highest in Asia or in the world as earlier reported.

The study shows that Asian countries with lower power rates enjoy government subsidies that account for 75 percent of the difference between Meralco’s tariffs and theirs.

When subsidies are added back to the tariffs in lower-priced countries, in some cases the total costs of supply in these markets are comparable with or even higher than Meralco’s.

The IEC study notes that one factor driving the differences between Meralco’s tariffs and those in the other countries is the high intrinsic cost of supply.

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(First published in the Philippine STAR of October 11, 2012)

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