Life under PNoy is daily sacrifice for workers – labor group

PRESS RELEASE

14 April 2014

The Filipino masses got a brief respite in yesterday’s convincing victory of their Pambansang Kamao over Timothy Bradley, yet such a moment of glory cannot gloss over the fact that life remains a difficult fight for survival under the present administration. 

 

In their traditional rendition of “Kalbaryo ng Manggagawa at Maralita” held this morning at Mendiola, members of the labor group, Partido ng Manggagawa (PM), called the attention of the Aquino administration on several issues where ordinary workers were practically and perpetually “crucified”. 

 

These issues include the problems of unemployment, contractualization, and the deepening inequality between the rich and the poor.

 

“In truth the ‘tuwid na daan’ was a tricky road to trek.  It remains a “kalbaryo” -- a daily sacrifice for ordinary workers who are continuously denied the rights and opportunity to live a decent life,” said PM Secretary General Judy Ann Miranda. 

 

Miranda said life under the Aquino administration remains a difficult fight for survival to both men and women who carry the burden of jobs crisis characterized by rising unemployment, low-wage and contractual work arrangements. 

 

According to the Social Weather Station (SWS) 27 out of 100 adult Filipinos were considered unemployed in December 2013.  The same survey also showed that unemployment was highest among women (35.9%) and among youth (52.3%) under the age group 18-24.

 

And for those who are employed, added Miranda, the working conditions remain very harsh with millions of workers living a slave-like subsistence under contractual work arrangements while their bosses join the club of the world’s top billionaires. 

 

According to PM’s own study, the workers real wage increased by mere 14% between 2006 and 2013 while the net worth of the country’s 10 richest capitalists increased by 1,005%. 

 

The group likewise lambasted the government for failing to address the problems of high power rates, the high cost of basic goods and services, as well as the deteriorating state of our mass transport system particularly the MRT and LRT.

 

The group, together with the labor coalition Nagkaisa!, are now preparing their forces for a major nationwide action on Labor Day.

Workers want full prohibition not a compromise deal on power rate hike

PRESS RELEASE

NAGKAISA

20 March 2014

 Organized labor under Nagkaisa is insisting for no less than the full prohibition of the December 2013 and January 2014 rate hike, rejecting in effect the Philippine Electricity Market Corporation’s (PEMC) recomputed rate that is 80 percent lower than the approved market rate in December and January.

 PEMC, which operates the Wholesale Electricity Spot Market (WESM), said on Tuesday that it had finished its recalculation of market prices in compliance with the Energy Regulatory Commission (ERC) order of March 3.  For the December 2013 billing, it set the new spot market rates at P6.007 (76.35 percent lower) than the P25.404 per kWh, and P6.246 (77.98 percent lower) than the original P28.367 per kWh for the billing month of January 2014. 

 “The numbers are out and PEMC’s recomputed rates bared all the elements of market failure.  We insist that any residual cost coming from this failure must be deemed unjust and therefore should not be passed on to consumers,” said Wilson Fortaleza of Nagkaisa power team. 

 Fortaleza, who is also the spokesperson of Partido ng Manggagawa (PM), argued further that in this particular case, the market failure was also a result of regulatory failure the more it should not be borne by the consumers.

 He pointed specifically to the failures of the ERC and PEMC to regulate the market despite the expected tightness in supply due to the Malampaya shutdown and also being aware of official reports citing repeated occurrence of market abuse since WESM started operating in Luzon in 2006; and the failure on the part of the Department of Energy (DoE) to ensure reliable supply of power and impose sanctions on erring power plants. 

 Tomorrow, Nagkaisa and the Power to the People (P2P) network will stage a picket rally at the PEMC to call for the suspension of WESM operations, saying it is not the consumers but the rich owners of generation and distribution companies who profitably gain from this fraudulent trading scheme.

There are also reports that the PEMC Board, who are not independent but made up of the players themselves, receives fat compensations and other perks, including brand new service vehicles.

“We challenge the government to tell the people the truth that WESM won’t work in a very small and highly concentrated market ruled by certified predators in the power industry,” concluded Fortaleza.

ERC asked to fully void rate hike, suspend WESM operations

PRESS RELEASE

Nagkaisa!

Labor groups under the Nagkaisa coalition is asking the Energy Regulatory Commission (ERC) to fully void all pending rate hikes in Luzon that were affected by ‘market failure’ during the maintenance shutdown of Malampaya gas platform from November to December last year. 

In addition the group is also calling for the suspension of the Wholesale Electricity Spot Market (WESM) operations to protect consumers from predatory pricing to one of the most essential of human needs – electricity. 

The call came after the ERC, invoking police powers, ordered the Philippine Electricity Market Corporation (PEMC) to ‘recalculate’ the WESM prices during the said period.

“Now that the ERC begins to invoke police powers in dealing with market failures we then demand that it utilizes them to the max.  If not then its order for recalculation of WESM prices in December can be viewed as mere publicity stunt,” said Wilson Fortaleza of Nagkaisa power team. 

The group is particularly cautious about a recalculation that may result to mere reduction in rate rather than in complete prohibition of the amount applied which in the case of Meralco totalled P4.15/kWh. ERC Executive Director Saturnino Juan has already indicated that the recalculation may result to the reduction of rates by more than half.  

Fortaleza, who is also the spokesperson of Partido ng Manggagawa (PM), reminded the ERC of the principle stated previously by Malacanang that unjust prices resulting from wrong commercial decisions or market failure cannot be passed on to or borne by the consumers.

“We are glad that at last the ERC has finally found the elements of market failure that it chooses to ignore during EPIRA’s 12 years of implementation,” said Fortaleza.

According to the group, WESM itself is a failure since it began operating in 2006.  By concept it is supposed to be at WESM where we can buy the cheapest electricity since the product is sold here at marginal cost of declared excess capacities of power plants. 

In July 2006 the inaugural price at WESM was P2.00/kWh.  During the Malampaya shutdown between November and December last year prices at WESM breached the maximum offer cap of P62.00/kWh.

“Kung hindi ito krimen ano ang tawag dito?  The market is supposed to be ‘reasonable’, ‘rational’ and ‘competitive’, to borrow words from ERC.  But it is not. It never was under EPIRA,” said Fortaleza, explaining that a highly concentrated electricity market in the country can never be reasonable as trading is controlled by pivotal plants owned by certified predators in the power industry.

Tomorrow Nagkaisa is organizing a picket at the offices of the ERC in Ortigas Center to press for the full voiding of Meralco and other pending applications for rate hike within the Luzon grid.  It will also call for the suspension of WESM operations.

Workers call for reformatting of the power industry

NAGKAISA

PRESS RELEASE

29 January 2014

The power industry needs not just a reboot but a major reformatting to better serve the country’s current and future energy needs and to satisfy the people’s clamour for affordable and sustainable power.

This, according to the labor coalition Nagkaisa, should be the new frame in seeking amendments or replacement to the failed Electric Power Industry Reform Act or EPIRA.

The group made this challenge as some of its leaders attended the Department of Energy’s (DoE) consultations on EPIRA amendments while its members called for the law’s scrapping in a demonstration held outside the Legends Hotel in Mandaluyong City. 

“A bad law like EPIRA may need some amendments to address the current mess.  But a wrong policy such as wholesale privatization can only be addressed by replacing it with a new one, a better one,” stated Josua Mata, one of the convenors of Nagkaisa.

Mata, who is also the secretary general SENTRO, told the DoE that workers will engage the amendment process in Congress and at the same time work for its replacement when such is probable amid the incurability of EPIRA and the viability of other options.

Another convenor, Louie Corral of the Trade Union Congress of the Philippines (TUCP), said amendments are necessary on issues of cross-ownership; the generation being a ‘non-public’ utility, reforms in the ERC (composition and rate-setting methodology); privatization of the transmission system and the Agus-Pulangi hydro complexes in Mindanao; retail competition and open access; and on electric cooperatives, among others.

It can be recalled that in a petition letter submitted to President Aquino during the Labor Day celebration of 2012, Nagkaisa raised the following issues to the Executive, some of these require legislative actions:

1.      Removal of oil and power from EVAT coverage;

2.      Stopping the indexation of/or pegging the prices of natural gas and geothermal steam to international prices of oil and coal;

3.      Stopping the ERC’s implementation of Performance Based Rate (PBR) methodology as this allows power firms to increase rates in anticipation of future expansion and other capital expenditures; and,

4.      Reforming the Energy Regulatory Commission (ERC).

The group also bats for the re-nationalization of the transmission lines and the permanent stay in the planned privatization of the Agus-Pulangi.

Partido ng Manggagawa spokesperson, Wilson Fortaleza, another convenor said the country and the people will not accept another 13 years of failed rule under EPIRA.

“It’s time to rethink and come up with a new model of public power that is completely different from what the industry is, before and under EPIRA. Fortunately we are blessed with so much national potential to do that.  It is only the government that thinks it can’t be done without the prescribed track imposed by the ADB and World Bank,” said Fortaleza.

Advisory: Workers picket DOE consultation

Workers to PNoy: Apply step 3 on P4.15/kWh Meralco hike

NAGKAISA

PRESS RELEASE

25 January 2014

  

Asserting its position that recent price hikes in electricity market were the result of wrong commercial decision and regulatory failure, the labor coalition Nagkaisa called on Malacanang to apply step 3 of President Aquino’s declared position on power hike. 

“Rectifications must be done outright on the P4.15/kWh Meralco hike, not on future occurrences of similar nature,” said Wilson Fortaleza, Partido ng Manggagawa (PM) spokesperson and one of the convenors of Nagkaisa labor coalition. 

Corrective steps were announced by Malacanang yesterday, amid the heightening controversy on Meralco’s sharp generation rate hike for the November - December billing period. 

Communications Secretary Herminio Coloma explained that under Step 1, preparations should be made to for foreseeable events such as regular maintenance. Step 2 is to ensure that regulators prevent collusion. And Step 3 will ensure that unjust price hikes are not passed on to and borne by the consumers.

“The test for Malacanang right now is whether it can apply Step 3 to the Meralco case and prevent the same in the future by applying Step 1 and 2,” said Fortaleza.

Nagkaisa said that if this can be done outright, it will erase the suspicion that investigations at the Executive and Legislative levels are leading to the exoneration of private players, pin the blame to the system operator, and subsidize the cost of market failure from the Malampaya fund.

The group is opposed to Malampaya subsidizing market failure as this is tantamount to subsidizing fraud.  Labor groups contend that risks borne out of wrong commercial decisions must be at no cost to consumers.

Workers had been protesting the power hikes on the belief that they were caused by flawed policies under EPIRA.

Workers ask Senate to declare EPIRA a failure

NAGKAISA

PRESS RELEASE

23 January 2014

With the committee on energy resuming its probe on the spike in Meralco rate today, the labor coalition Nagkaisa, pressed the Senate as a whole to declare the Electric Power Industry Reform Act (EPIRA) a failure and consider crafting a new policy framework for sustainable energy and energy democracy. 

The group, which held another picket outside the Senate building, said that unless there is a declaration to that effect, public hearings and investigations will offer no material relief to consumers.

Nagkaisa explained that since 2008, consumer groups have attended, submitted position papers, and argued against the ills of EPIRA before committee hearings of both houses of Congress, including those conducted by the powerful Joint Congressional Power Committee (JCPC).  Yet no actions were made to address those concerns. 

“Public hearings end with another scheduled hearing then nothing happens until another controversy arises. Workers are really tired of wishy-washy intervention on a social problem of this scale,” Nagkaisa said, referring to the crises of escalating power rates and diminishing supply. 

Nagkaisa asserted that since the enactment of EPIRA which led to the deregulation of the generation of generation sector, privatization of Napocor assets, creation of the spot market, and the introduction of performance-based regulation.  Fraud became the norm in the power industry as shown by rising prices and cartelization.

The group reminded the Senate that in 2008, Senator Miriam Santiago who chaired the JCPC then stated in her opening remarks in one of JCPC’s public hearings that EPIRA is a failure; the Senate is a failure as well as the Executive. 

“That is seven years ago and the people will not accept another decade of unrewarding probes to a mess that has been there since day one of the implementation of EPIRA,” said the group.

Nagkaisa has been protesting the power hikes which they believed were caused by flawed policies under EPIRA.

Workers to ‘gods of Faura’: Stop power firms’ blackmail, fraud

NAGKAISA

PRESS RELEASE

20 January 2014

While politicians and businessmen have joined President Aquino for the National Day of Prayer and Solidarity to the victims of natural and man-made calamities, workers in Metro Manila belonging to the labor coalition Nagkaisa, trooped to the Supreme Court to seek relief and ultimate deliverance from unjust power rate hikes. 

The fifteen (15) justices, also known as ‘The gods of Faura’, were set to hear oral arguments tomorrow on several petitions seeking injunctions to Meralco’s P4.15/kWh rate increase.  Prime in the agenda to resolve are questions on whether or not the Energy Regulatory Commission (ERC) committed grave abuse of discretion in approving Meralco rate hike; whether or not automatic rate adjustment is valid; and whether or not the generation sector is not a public utility and therefore beyond regulation by ERC, among others.

“We pray that the justices deliver us from a decade-old fraud and industry blackmail,” said Nagkaisa in a statement released during their picket at the gates of the Supreme Court building. The group was referring to frauds committed under the Electric Power Industry Reform Act (EPIRA), including the latest allegations on collusion and market abuse among power firms and the latter’s threat of rotating blackouts had they fail to collect rate increases. 

Nagkaisa asserted that since the enactment of EPIRA which led to the deregulation of the generation of generation sector, privatization of Napocor assets, the creation of spot market, and the introduction of performance-based regulation, fraud became the norm in the power industry as shown by rising prices and cartelization.

“It is no secret that owners of power firms, the so-called Voltage 5 (Aboitiz, Lopez, San Miguel, Henry Sy, and Pangilinan) have been earning record high profits from record high tariffs of their power-related firms,” said Nagkaisa.

The labor coalition recalled that lowering the cost of power was the pledge of the Arroyo administration when it prodded Congress to pass the EPIRA upon assumption to power 13 years ago today. 

Nagkaisa explained further that since 2008, many of its convenor groups have attended, submitted position papers, and argued against the ills of EPIRA before committee hearings of both houses of Congress, including those conducted by the powerful Joint Congressional Power Committee (JCPC).  Yet no actions were made to address those concerns. 

It likewise chided the Executive for peddling the line that the only choice for now is between expensive power, or having no power at all.

“We hope the Supreme Court brings light to a dark decade of power hikes, naked greed, and blackmail amid unreliability of power supply,” concluded Nagkaisa!

Advisory: Workers picket @ SC re Meralco rate hike

Media Advisory

20 January 2014

Contact: Wilson Fortaleza

09178233956

REQUEST FOR COVERAGE

PICKET @ SUPREME COURT

20 January 2014

10:00 AM

Day before SC hears oral arguments on Meralco rate hike

If Petilla can offer his head, why can’t Ducut and Ocampo do the same?

Press Statement

December 26, 2013

NAGKAISA!

The news of Department of Energy (DoE) Secretary Jericho Petilla tendering his resignation in the wake of failure to meet his self-imposed deadline in bringing back electricity to areas ravaged by typhoon Yolanda is all over the air.  Whether the President will accept his resignation or not can be part of a ploy. But nevertheless, Petilla had the guts to place his head on the chopping board.

We wonder, however, if other inept officials in the energy family – particularly Energy Regulatory Commission (ERC) Chairperson Zenaida Ducut and Philippine Electricity Market Corporation (PEMC) head Mel Ocampo can do the same.

Petilla who heads the DoE is equally responsible for the government’s failure to stop the P4.15/kWh rate increase imposed by Meralco.  But Ducut and Ocampo who are in the frontline and supposed to be the first persons to detect market failure and protect consumers' welfare stood idle before the coming tsunami of power hikes. They therefore should go.  

Truth is, throughout their tenures, they have consistently failed to discharge their duties of regulating the power industry properly. The latest fiasco is just the culmination of years of ineptitude and incompetence.

As early as 2012, they were aware of scheduled maintenance shutdown and yet they did nothing to prevent the largest market failure in the power sector to date. In the process they unduly enriched Independent Power Producers (IPPs) to the tune of 10 billion pesos for a month’s worth of power outages!

They should go based on the principle of command responsibility. At the least, they allowed the electricity market to be gamed, and at the most, they are a party to the reported collusion among power firms.

                                     

Ducut and Ocampo should be investigated for possible charges of economic sabotage.

It’s also the time for the regime of Electric Power Industry Reform Act (EPIRA) to go.

Militants slam Serge Osmena for “no collusion” statement

Press Release

December 19, 2013

The militant Partido ng Manggagawa (PM) today slammed Sen. Serge Osmena for pre-empting the probes by the Department of Energy (DOE) and the Department of Justice (DOJ) of the huge power rate hike with his statement yesterday that there is no collusion among generation companies and Meralco. The two departments are precisely looking into allegations of collusion.

“Serge is a consistent supporter of power industry players since his sponsorship of the EPIRA Law which ushered in the era of high electricity rates to his defense of Meralco’s gargantuan rate hike,” opined Wilson Fortaleza, PM spokesperson.

Fortaleza is one of the signatories to the complaint against Meralco and generation companies lodged by groups last Monday with the DOJ Office for Competition. DOJ Secretary Leila de Lima pledged to come up with a finding by January next year.

Meanwhile PM continued its campaign of picketing Meralco branches. Yesterday its Cavite chapter protested at the Meralco branch and depot in Dasmarinas City. Tomorrow, PM members will picket the Meralco branch in Marilao, Bulacan. Last Monday PM staged a coordinated picket of branches in Paranaque, Rizal and Cavite.

“Serge’s statement is a mere opinion and not even a conclusion after an investigation. At the Senate hearing, even as senators grilled officials of the Energy Regulatory Commission and the DOE, they handled with kid gloves representatives of Meralco and the generation companies. As to why, it may be necessary to look into election campaign contributions by power industry players,” Fortaleza averred.

PM asserts that the Meralco price increase is unconscionable since it is an act of economic terror amid calamities, inequality and poverty in the country. Fortaleza argued that “It is also unfair. Workers in NCR were only granted P10 per day or P260 per month under Wage Order No. 18. The P4.15/kwh total increase in Meralco’s rate is an additional P830 burden for households consuming 200 kwh per month.”

“The worker-led consumer campaign against collusion by Meralco and the generation companies to drive electricity prices will continue and intensify next year. Consumers anger will boil over when they get their next electricity bills,” Fortaleza predicted.

Protests vs. Meralco rate hike spreads outside Manila as coordinated picketing staged

Press Release

December 16, 2013

The militant Partido ng Manggagawa (PM) staged a coordinated picketing of Meralco branches as protests against the huge power rate hike intensified at the grassroots level and spread outside Metro Manila. Meralco branches in Paranaque, Rizal and Cavite were picketed this morning and afternoon by several hundred workers and urban poor.

Also today, the PM spokesperson together with leaders of other groups formally asked for an anti-competition inquiry on Meralco’s rate hike. The request was filed with the Office for Competition which is under the DOJ and was created by E.O. 45 series of 2011.

“If competition exists in the power industry then business interests would collide but under EPIRA, the players collude,” stressed Wilson Fortaleza, PM spokesperson, as he joined the filing of the request for inquiry on unfair competition against Meralco and generation companies.

He added that “It is futile to pursue an honest scrutiny of Meralco’s huge rate hike through the ERC which is totally captured by monopolists in the power industry. Instead we hope the Office from Competition can give a fair hearing to the complaint. If PNoy is serious about investigating Meralco’s hike, then he can do something through the Office for Competition which is under his authority, unlike the ERC.”

At 10:00 am today, PM members trooped to the Meralco branch in Tambo, Paranaque and Antipolo City in Rizal. Later at 3:00 pm, other PM members in Cavite picketed branches in the towns of Rosario and Dasmarinas.

In the next few days, PM will continue the series of protests with pickets in Marilao, Bulacan and GMA, Cavite.

Advisory: Filing of anti-competition inquiry; coordinated picketing of Meralco branches

Media Advisory
December 16, 2013

Groups to ask for anti-competition inquiry

as pickets to be held in outlying Meralco braches

WHAT: Picket-protests and request for anti-competition inquiry vs. Meralco and generation companies

WHEN: Today, December 16, 11:00 am

WHERE: Department of Justice (DOJ), Faura, Manila

DETAILS: Members of the Partido ng Manggagawa will have a picket-protest today at the DOJ as their leaders together with other groups and personalities formally ask for an anti-competition inquiry on Meralco’s rate hike. The request will be filed with the Office for Competition which is under the DOJ and was created by E.O. 45 series of 2011.

Also today, the protests vs. Meralco’s fare hike goes to the grassroots and expands outside Metro Manila with a coordinated picketing of Meralco branches:

10:00 am, Tambo, Paranaque and Antipolo, Rizal

3:00 pm, towns of Rosario and Dasmarinas in Cavite

“It is futile to pursue an honest scrutiny of Meralco’s huge rate hike through the ERC which is totally captured by monopolists in the power industry. Instead we hope the Office from Competition can give a fair hearing to the complaint. If Pnoy is serious about investigating Meralco’s hike, then he can do something through the Office for Competition which is under his authority, unlike the ERC,” according to Wilson Fortaleza.

Advisory: Anti-competition inquiry vs Meralco; coordinated picketing of Meralco branches

Groups to ask for anti-competition inquiry

as pickets to be held in outlying Meralco braches

WHAT: Picket-protests and request for anti-competition inquiry vs. Meralco

WHEN: Tomorrow, December 16, 11:00 am

WHERE: Department of Justice (DOJ), Faura, Manila

DETAILS: Members of the Partido ng Manggagawa will have a picket-protest tomorrow at the DOJ as their leaders together with other groups and personalities formally ask for an anti-competition inquiry on Meralco’s rate hike. The request will be filed with the Office for Competition which is under the DOJ and was created by E.O. 45 series of 2011.

Also tomorrow the protests vs. Meralco’s fare hike goes to the grassroots and expands outside Metro Manila with a coordinated picketing of branches in Paranaque, Rizal and Cavite. Between 10:00 am and 11:00 am tomorrow, workers and poor will picket Meralco branches in Tambo, Paranaque; Antipolo, Rizal; and the towns of Rosario and Dasmarinas in Cavite.

“It is futile to pursue an honest scrutiny of Meralco’s huge rate hike thorugh the ERC which is totally captured by monopolists in the power industry. Instead we hope the Office from Competition can give a fair hearing to the complaint. If Pnoy is serious about investigating Meralco’s hike, then he can do something through the Office for Competition which is under his authority, unlike the ERC,” according to Wilson Fortaleza.

P4.15/kWh power hike is bonus for doing nothing – labor group

PRESS RELEASE

09 December 2013

Just for doing nothing, Meralco and several generation companies (Gencos) were rewarded a whooping bonus of P4.15/kWh, the labor group Partido ng Manggagawa (PM) said in a statement.

 

According to PM, the impending increase, the highest in the country’s history and in the world, could have been avoided had Meralco and gencos planned for replacement power to address the expected load gap from Malampaya’s scheduled regular maintenance.

 

“But in a privatized industry regime under EPIRA, power utilities earn handsome profit just by doing nothing and even during times of calamities. Power utilities like Meralco control the whole industry from generation to transmission to distribution and can thus exercise monopoly pricing limited only by what the market can absorb, meaning what the consumers are willing to pay in exorbitant electricity costs,” said PM spokesman Wilson Fortaleza.

 

About 2,700 MW of power from Sta. Rita, San Lorenzo, and Ilijan plants were lost due to the shutdown of Malampaya. Luzon needs at least 6,000 MW to meet its peak load demand.

 

“Imagine a deficit of 2,700 megawatt, an anticipated crisis, yet Meralco and Gencos did nothing but wait for the billing period and impose their new and adjusted rates,” lamented Fortaleza.

 

The group, which joined the Freedom from Debt Coalition and Nagkaisa in a picket held at the ERC this morning, added that the crisis is made worse when the government, particularly the Department of Energy (DoE) and the Energy Regulatory Commission (ERC), “stood idle in the face of the surging tsunami of price hikes in the electricity market.”  The government should have disallowed other power plants to shutdown simultaneously with Malampaya to ensure stability of supply in the Luzon grid.

 

Fortaleza explained that replacement power is a global template for every power supply contract since outages, both regular and forced, is routine in the power system. In many PSA’s the obligation to find replacement power or plan for alternative set up belongs to Gencos since they have contracts to comply in ensuring reliable supply of power to their customers. 

 

Unfortunately, said Fortaleza, most of ERC-approved PSAs assigned replacement power to Meralco and the Wholesale Electricity Spot Market (WESM), where spot prices which as of yesterday range from P17/kWh to P52/kWh.

 

Fortaleza added that Gencos have options to avoid the instability and he cited the case of Sta. Rita and San Lorenzo.  Based on First Gen’s submission to the Philippine Stocks Exchange (PSE) on March 20, 2012, it explained that,“Although the Sta. Rita plant is intended to operate on natural gas, if delivery of natural gas is delayed or interrupted for any reason, the plant has the ability to run on liquid fuel for as long as necessary without adverse impact to its operation or revenues.” The same business model goes with San Lorenzo.

 

Now did Gencos, Meralco, and the government considered this option?

 

“No, they just did nothing,” concluded Fortaleza.

Highest power rate hike not acceptable, unjust

Press Release

December 7, 2013

The Partido ng Manggagawa, a member of labor coalition Nagkaisa, rejects the impending power rate hike of P4.15/kwh in the Meralco area based on the following grounds:

1.    This is unconscionable, an act of economic terror amid calamities, deepening inequality and poverty in the country.

2.    This is unjust.  When imposed, the P4.15 rate adjustment will be the highest in Philippine history.  This will also be the highest residential rate in the world.

3.    This is unfair.  Workers in NCR were only granted P10 per day or P260 per month under Wage Order No. 18.  The P4.15/kwh increase in Meralco rate is additional P830 burden for households consuming 200 kwh per month.

4.    The rate hike, on the contrary, cannot be imposed arbitrarily by Meralco as explained earlier by Malacanang.  Meralco has to secure the approval of the Energy Regulatory Commission (ERC).

5.    The steep hike could have been prevented.  The Malampaya shutdown is not due to force majeure.  It is part of regular biannual maintenance therefore expected and has already been factored in in Meralco’s power supply agreements (PSA) with its suppliers, particularly First Gas’ Sta. Rita and San Lorenzo and Kepco Ilijan.  The PSA should have included provisions on “replacement power”.

Based on First Gen’s submission to the Philippine Stocks Exchange (PSE) on March 20, 2012, it was explained that,“Although the Sta. Rita plant is intended to operate on natural gas, if delivery of natural gas is delayed or interrupted for any reason, the plant has the ability to run on liquid fuel for as long as necessary without adverse impact to its operation or revenues.” The same business model goes with San Lorenzo.

6.    This is market failure.   Collusion among generation companies, which has been the name of the game under EPIRA, is most possible after the Malampaya shutdown to drive prices at the Wholesale Electricity Spot Market (WESM) up.

7.    This is failure in governance.  The government, particularly the Department of Energy, should not have allowed this artificial shortage as a result of simultaneous shutdowns of power plants following the shutdown of Malampaya. 

Inihahalintulad namin ang delubyong ito bilang panibagong kalamidad dala ng kasakiman ng mga kumpanya ng kuryente na walang pinipiling panahon para gawin ang kanilang pandaramobong, at sa gubyerno na sa lahat ng panahon ay natutulog sa pansitan.

Predatory MERALCO price hike slammed by NAGKAISA

Press Release

December 6, 2013

Nagkaisa

Meralco already insured against maintenance shutdowns, Power Supply Agreements cover Meralco risk with power providers

The NAGKAISA labor coalition denounced the December P3.50 per kWh rate increase as an immoral imposition and an unconscionable predatory move in the face of our massive national suffering and despair. Instead of moderating its greed, MERALCO and the generating companies First Gas (Sta. Rita), South Premier Power Corporation (Ilijan) and Therma Mobile, Inc. (San Lorenzo) – which are its cohorts – chose to further impoverish hardworking Filipinos and complicate the already difficult road to national recovery.

MERALCO residential rates currently pegged at Php12.46 per kWh will now be hiked to Php15.96 per kWh, representing a 28% increase. The new rate is equivalent to US$ 37 cents per kWh. That is the highest residential rate, bar none, in the WORLD. Its consequences for families coping with the triple whammy of NAPOLES-scale corruption, spiralling oil and LPG prices, and natural calamities are immense.

For industry, where power rates already constitute 45% to 55% of operational costs, particularly for Small and Medium Enterprises (SMEs) and BPOs, the rate increase will greatly affect their business viability. For the national economy, it compromises our regional competitiveness in the ASEAN and will be a disincentive to locators remaining and to the entry of foreign direct investments.

NAGKAISA pointed out that before a new tariff formula called Performance-Based Rate-making (PBR) was implemented by the Energy Regulatory Commission (ERC), MERALCO only made an annual net profit ranging from Php3 to Php6 billion. Under PBR in 2012, MERALCO declared a net income of Php16.25 billion. For 2013 MERALCO expects a consolidated net income of Php17 billion. NAGKAISA decried this overly-generous rate of return allowed by ERC which allowed MERALCO to earn in just one year what it used to take them 3 years to earn.

NAGKAISA also countered the MERALCO assertion that the maintenance work on Malampaya and resorting to the more expensive sources of WESM would result in a power rate increase of anywhere from Php2 per kWh to Php3.50 per kWh. NAGKAISA argues the following:

·       The scheduled maintenance of Malampaya and other plants should or was already imputed in the MERALCO rate. If MERALCO management did not prudently build this into their rate then the owners and management of MERALCO should bear the loss, not the consumers. The maintenance was scheduled way ahead of time and the cost consequences should already have been placed in the power supply agreements which MERALCO entered into.

·       If there is a forced outage, MERALCO and the power producers First Gas (Santa Rita), Therma Mobile (San Lorenzo) and SPPC (Ilijan) from which MERALCO buys its power are insured against possible spikes in costs. Why is MERALCO passing the burden to consumers when there is insurance for forced outages. Again, if MERALCO did not enter into any form of insurance or contract stipulation as to who will pay for the alternative supply in case of an outage (the alternative supply in this case is WESM), then MERALCO again has acted imprudently and should bear the cost of its imprudence.

·       MALAMPAYA is providing only a certain percentage of the power needs of MERALCO. Why are the entire costs of the downtime of Malampaya being borne by MERALCO consumers? How did it amount to a possible P3.50 per kWh increase?

·       Why has the ERC as regulator not stepped-in to validate the current claims of MERALCO when there are Commission on Audit findings of overcollection in 2004 and 2007 in the generation charges of MERALCO? Does ERC take the manifestations of MERALCO and the generation players as gospel truth?

·       Why has the DOE – or the Palace for that matter – not addressed the possibility of resorting to the MALAMPAYA FUND to reduce rates and to cushion the impact if indeed there is a problem not anticipated in the power supply contracts entered into between MERALCO and the generators?

THE TRUTH OF THE MATTER IS THAT CONSUMERS ARE BEING MADE TO ADVANCE WHAT THE MERALCO WILL BE COLLECTING FROM ITS INSURERS EVENTUALLY. When MERALCO entered into its supply contracts, it inputted and covered against all projected events and the cost consequences. These costs were built into the original power supply agreement and are therefore built into the rate. Further, MERALCO insured against all risks. MERALCO IS TRYING TO COLLECT FROM ITS CUSTOMERS BECAUSE IT THINKS IT CAN FOOL THEM. ENOUGH IS ENOUGH.

NAGKAISA has warned that the Wholesale Electricity Supply Market (WESM) does not and cannot work where you have insufficient supply. Given inadequate power supply, there will be no competition to drive down rates because it will be a sellers market. NAGKAISA, as a disinterested party, had already warned the government of this in its meetings with the economic cluster of the Cabinet in April and May 2013. NAGKAISA notes that notwithstanding the notable failure of WESM to bring down electricity prices in Luzon and Visayas, the DOE is currently piloting it in Mindanao where power supply is also inadequate.

NAGKAISA warns that the general public are beginning to realize that the Palace is a defender of MERALCO by its statements that there is “regularity” to the rate increase because it was “in accordance with the law.” NAGKAISA reminds the Palace that it is not for the NAGKAISA or the Palace nor the DOE to determine regularity. That is a function that clearly lies with the ERC. It is the ERC which must determine the course of action to be taken: to set the increase aside or to cushion its impact through rate increases staggered over a longer period of time.

NAGKAISA also reminds the Palace that perhaps something is deadly wrong with the EPIRA Law and that it is time to take a second hard look on how to ensure affordable power and supply that is reliable. We reiterate our call for the creation of a Presidential Task Force to bring down power rates. The Palace should talk to disinterested parties – not the power cartel.

Finally, NAGKAISA reminds the Palace that if in its fight against corruption, it brought down an Ombudsman and a Chief Justice, it can certainly do something about a certain ERC Chairperson named Ducut. Consumer and labor representation in the ERC is long overdue.

Groups say ADB harms workers in the Philippines

Press Release

May 4, 2012      

More than a hundred members of Partido ng Manggagawa (PM) and the Philippine Airlines Employees’ Association (PALEA) joined the newly-formed Nagkaisa labor coalition in a rally workers rally against the Asian Development Bank (ADB) annual meeting this morning as President Benigno Aquino II was due to give as speech.

“PNoy should not cover up the number of poor in the Philippines and the ADB should not wash its hands off the worsening poverty in the country. The ADB is an instrument of corporate greed that has aggravated the destitution of the 99% in Asia,” asserted Rene Magtubo, PM national chair. “ADB’s privatization intensifies poverty,” the workers chanted as they assembled in Harrison Plaza and then tried to make their way to the PICC, the venue of the meeting.

Magtubo explained that “The ADB meeting’s theme of inclusive growth is mere doubles-speak for its policies of privatization are tailor-fit to facilitate the fire sale of state-owned assets to giant multinationals and big capitalists. As a result of ADB-funded privatization, the costs of electricity and water in the Philippines have skyrocketed and as a result workers real wages have fallen despite yearly increase in nominal wages.”

The ADB pushed for the passage and provided loans for the implementation of the Electric Power Industry Reform Act (EPIRA). In 2000, Magtubo exposed a P500,000 payola for members of the House of Representatives to ensure the legislation of the controversial EPIRA.

The Nagkaisa-led rally of several hundred workers today follows the coalition’s historic 20,000-strong May Day mobilization which brought together the country’s main labor groups for the first time since the 1980’s. “The unity of labor last May 1 has made government listen to our concerns. The rally today is part of the next step—the struggle of workers to make government grant our demands,” Magtubo insisted. Among the list of demands that Nagkaisa submitted to Malacanang last Labor Day is the repeal of EPIRA and the lowering of power costs to consumers.

Magtubo expressed fear that the ADB also has a hand in the proposed privatization of the Agus-Polangi hydroelectric plant in Mindanao as a purported solution to the power crisis in the island. The proposal has been temporarily shelved due to widespread opposition in Mindanao.

He added that “The ADB’s shadow can also be seen in the scheme to sell off to private interests the provision of water services in municipalities. The ADB is Asia’s mini-IMF and mini-WB, and its public relations pitch is a result of the discrediting of the policies of privatization, deregulation and liberalization worldwide.”