POSTSCRIPT / January 26, 2014 / Sunday


Opinion Columnist

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Setting up scapegoat won’t cut power rates

BLAME GAME: Heaping the blame on the chair of the Energy Regulatory Commission for the continually rising power rates of the Manila Electric Co. (Meralco) and summarily firing her will not solve the pricing problem.

Targeting ERC Chair/CEO Zenaida Cruz Ducut and whipping up hatred for her will just mislead consumers further and shift the blame from the main culprits.

The power price upsurge is actually traceable to the government’s failure to (1) build more power plants to keep supply a safe distance ahead of the growing demand, (2) develop cheaper alternative sources, and (3) moderate the appetite of the power moguls. See Postscript of Jan. 14, 2014, at:

Ducut is not lily-white, but she looks like another victim of the blame game of an administration covering up for its shortcomings and using demolition tactics as prelude to the chopping off of the head of whoever it wants to replace.

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COLLEGIAL BODY: The Party-list group Akbayan accused Ducut before the Office of the President of “gross neglect of duty and incompetence by tacitly approving without the barest hint of due process Meralco’s unprecedented power rate hike.”

Most people, including some party-lists, are unaware that ERC rulings on rates are handed down not by the chair (Ducut in this case) but by the quasi-judicial and quasi-legislative commission acting as a collegial body.

They are also unaware, or they gloss over the fact, that what the collegial body approved last Dec. 9 was not the contentious P4.15/kilowatt-hour rate increase, but only the clearance sought by Meralco to stagger the collection of its generation cost for November 2013.

Staggering the collection was welcomed by many consumers since its impact is spread out over a longer period. (But personally, I would rather have it collected in one blow instead of being staggered and interest tacked on the balance.)

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PRE-DUCUT RULES: Also unknown to many is the fact that the P4.15/kilowatt-hour increase of Meralco rates was calculated under the Automatic Rate Adjustment rules promulgated by the ERC way back in 2004 — before Ducut became ERC chair.

Under the pre-Ducut rules, Meralco and all other distribution utilities can calculate on their own their monthly generation charges based on a set formula. They are thus able to immediately recover allowable generation costs without incurring any carrying costs that are passed on to consumers.

(Btw, Ducut has a fixed term that ends in 2015. Like other officials with fixed terms, she can be removed only for cause and after due process. That may explain why her detractors are busy digging up dirt on her and highlighting it in media before her head is chopped off.)

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WESM PRICE: The Senate investigation has shown that the main cause of the Meralco rate increase was the high price of P62 per kilowatt-hour it paid at the Wholesale Electricity Spot Market at the time the Malampaya natural gas facility was on maintenance shutdown.

As the gas was not available, three gas-fired plants in Batangas shifted to more expensive liquid fuel, jacking up generation and retail costs. By coincidence or collusion, five other plants also suspended operation, worsening the power supply problem.

The WESM is an exchange where power generators offer their supplies. The price at which distributor Meralco buys from WESM is passed on to its consumers with a markup and the 12-percent value-added tax of the government padding the retail price.

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PPP ADOPTED: In Pampanga, meanwhile, Gov. Lilia G. Pineda and the provincial board have adopted a socio-economic agenda patterned after the Public-Private Partnership program of the Aquino administration.

The provincial government is wooing investors to participate in most of Pampanga’s socio-economic programs and projects, according to Rosve Henson, majority floor leader of the provincial board representing the third district.

The Sangguniang Panlalawigan has approved the governor’s PPP policy direction as a development framework for all the 19 towns and three cities of Pampanga, Henson said.

Pineda was among 400 or so Central Luzon lawmakers, local officials, businessmen, and representatives of corporate locators at the Clark Freeport who held a summit last Jan. 16 to prod the administration to issue a clear policy on the commercial development of the 4,500-hectare former US air base.

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MEDICAL SUPPLIES: The governor has begun implementing the PPP policy in the 11 provincial hospitals, particularly in the sourcing of drugs and other medical supplies.

The capitolio is accrediting private suppliers of medicine to save on costs, particularly in inventory and warehousing, to promote transparency and ensure that the medicines are not expired or about to. Some 30 percent of Pampanga’s annual P1.2-billion budget has been earmarked for hospitals and their upgrading.

Pineda is also tapping the private investors to develop parks and tourist destinations, such as the St. Peter shrine in Apalit, Mt. Arayat National Park in San Juan Baño, Arayat, and the Paskuhan Vilage in San Fernando.

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CHINO’S CONCERT: Colleague Bel Cunanan tells us of Fil-Fest sponsoring the concert of virtuoso Chino Gutierrez at Insular Life Alabang on Feb. 8, at 8 pm. Please email her for details at

As music critics and his professors acknowledge, Chino is truly gifted. But he is also quite needy. In fact he had to quit his studies 1-1/2 semesters ago in the Munich Academy of Music & Theater, where he had attended two years of bachelor of music studies, when his family ran out of funds. Chino has to get back to Munich by March this year or he loses his enrollment.

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(First published in the Philippine STAR of January 26, 2014)

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