“In spite of the P0.71 per kWh reduction from Napocor, Meralco lowered its charges by only P0.30.”
by Ducky Paredes
Who is behind the print advertising that tries to belittle, if not completely denigrate, the efforts of the National Power Corporation (Napocor) to bring down the cost of electricity when it announced that it was reducing its rate by P0.71 per kWh?
I ask this question knowing fully well who is doing the deed. After all, which power distributor wants to pass on to Napocor the blame for the high rates (highest in the country) they are overcharging their customers?
In spite of the P0.71 per kWh reduction from Napocor, Meralco lowered its charges by only P0.30. (By the way, do you know that Napocor had also lowered its generation charge by P0.67 for the period January to March 2008 but this was not reflected in your Meralco bills?)
The author of the black propaganda against Napocor is making much of the Energy Regulatory Commission (ERC) directive ordering Napocor to refund some P10 billion representing supposed overcharges over a two-year period.
The thesis of the anti-Napocor blasts hinges on these arguments:
– The P10 billion that the ERC ordered Napocor to return to consumers resulted from the appreciation of the peso against the dollar and should not have been booked as profits.
– Napocor purposely delayed its application for rate adjustment under the generation rate adjustment mechanism (GRAM)and incremental currency exchange rate adjustment (ICERA) mechanisms for the period July 2006 to March 2008. Had Napocor made a prompt application, according to the black prop, this would have meant earlier reductions of the company’s generation rates.
– Napocor is deceiving the public with its announced P0.71 reduction in generation charges because it is also asking the ERC for an upward adjustments of the generation rates.
While on the surface, it looks like Napocor is a worse enemy of the suffering people than Meralco is, there is a proper explanation for everything.
1. On the P10 billion, there is a big difference between the supposed P10 billion overcharge of Napocor and the series of overcharges illegally charged by Meralco to us, its customers – P30 billion in income taxes from Feb. 1994 to April 2003; several billions more in unauthorized and illegal charges that the Supreme Court ordered to be returned to the consumers; P13 billion in ghost deliveries; 291 million kWh worth P2.33 billion consumed by Meralco itself; P21.4 billion in meter deposits and so on.
The difference is this: what Meralco overcharged went into its corporate pocket and it took an order from the Supreme Court and from the ERC for Meralco to return our money.
On the other hand, Napocor voluntarily applied with the ERC for the approval of the GRAM and ICEA adjustments, which means that Napocor wanted to return the money to the consumers.
2, The delay in the application for rate adjustment for the period July 2006 to March 2008 was actually for the 8th ICERA and the 9th GRAM) and the delay in filing was attributable to two reasons:
The previous applications for the 7th ICERA and the 8th GRAM were filed with the ERC in March and April 2007. While ERC procedures state that the Commission should render decisions for in not more than 45 days after filing, the decision on the two applications were handed down only in December 2007, a delay of six to seven months.
Napocor had to secure the approval of the filing of the application by its governing body, the National Power Board.
3. The application for an upward rate adjustment is necessary because of the higher cost of imported coal used in three coal-fired power plants.
The Sual plant can use coal Chinese coal which averaged at $129.97 per metric ton for the first five months of 2008 compared to only $72.99 per MT in 2007.
The Pagbilao plant can use only Indonesian coal and this averaged at $$91.58 per MT for the period January to May this year as against only $56.38 per MT last year.
The Masinloc plant can use both Chinese and Australian coal and Australian is at $117.70 per MT today from only $64.82 in 2007.
Only the Calaca plant uses local coal from Semirara but even local coal has had its price increase, too.
For Napocor, the largest factor that affects the price of its electricity is the price of coal, not the oil price. This is because coal constitutes 29 percent of the Napocor power mix while the share of oil in the power mix has been brought down to just 8 percent since 2006.
The good news is that while the price of coal has more than doubled since January 1, 2007, it is still much cheaper than oil. Bunker oil as fuel for generating electricity at least three times more expensive than coal.
According to Lasse Holloopainen, president of the Philippine Electricity Market Corporation (PEMC) which operates the Wholesale Electricity spot Market (WESM), the effect of the higher prices of coal will be felt in the third quarter (July to September) of this year.
However, it will only be next year when the consumers will feel the greater impact of the price increases of coal. This is because Napocor will have to wait for the ERC’s approval of higher generation rates, as provided under the Deferred Accounting Adjustment (DAA) system of the GRAM and the ICERA.
Note also that while oil companies have raised the prices of gasoline and diesel 17 times since January this year, this is the first time this year that Napocor will be seeking an upward rate adjustment for its generation charge.
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Does anyone know of a good company for a fire insurance policy for our townhouse. When we bought this more than ten-years ago through the Bank of the Philippine Islands, it came with a fire policy from BPI/MS Insurance Corporation. We have been paying the premiums regularly.
In 2007 as in 2006, we never received a billing from the company until we called them. By 2007, our policy date was July 2, (It was in February earlier but was paid only in July because there was no notice from the company and we had to inquire several times before they sent a billing.)
We paid the premium through the nearby BPI branch. Imagine that when I called to inquire why we did not yet have a billing, I was told that they had actually cancelled our policy in 2007 because their records show that we did not pay the premium. On being told that we paid, they asked for proof of this payment.
I uttered the usual expletive and cut the call. I will go to my bank on Monday to ask for the return of our money that we paid in 2007 for an insurance policy that was, according to their sister company, was not in effect although I do have a 2007 policy good to July 2, 2008 (which they said they cancelled). At any rate, I refuse to deal with idiots and I certainly not insure my house with them. Life is too short to waste any time with stupid people
Thus, I am looking for someone else to write a fire policy on our townhouse. Do send me an e-mail if you know anyone who can give me better service than BPI/MS Insurance Corporation, which is apparently staffed by total imbeciles.
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hvp 07.04.08)
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