23 August 2004
The Freedom from Debt Coalition together with other progressive people’s organizations under Alternatiba and Kuryente Alliance converge today to show our firm opposition to Napocor's petition for almost P2 per kilowatthour rate increase.
It is with great urgency that we call on the public to show their vehement opposition to this power rate hike, as the September 2 deadline prescribed by the law for the Energy Regulatory Commission to grant Napocor any provisional increase is fast approaching.
Napocor's rate hike petition embodies years of government's flawed policies and onerous transactions, which it wants Filipinos to bear unquestioningly. We reject outright Napocor’s rate increase petition on the following grounds:
1. The government and Napocor must address the real reasons for NPC’s heavy losses.
Government is asking consumers to bear a rate hike so that Napocor can recoup a P115-billion loss, the bulk of which comes from Napocor's excessively high cost of contracts with the Independent Power Producers (IPPs).
These contracts are unjust and grossly disadvantageous to Filipino consumers and to the Philippine government. The IPP contracts bind Napocor to pay for a fixed volume of electricity at fixed rates, whether or not the power is actually produced or used. Also, Napocor absorbs the cost of any fluctuation in the price of fuel used by the IPPs and also the cost of foreign currency fluctuation.
Since the government considers these costs as "true cost of electricity," consumers were forced to pay for them previously through the PPA. Now, we are paying for them as part of the Generation Charge.
Napocor says we are not paying enough. Napocor says we are not paying the "true cost" of electricity. In fact, we are paying too much! We are paying for the cost of electricity that we use AND we are even paying for electricity that IPPs do not produce.
An increase in Napocor rates is another palliative solution to address Napocor's losses, similar to President Arroyo’s suspension of Napocor’s PPA in 2002. This decision, which the President used to score brownie points, was a lame decision. Now, it turns out to be a major cause of Napocor's unsustainable losses, which Napocor wants to pass on to the consumers.
2. The increase in generation rates is unnecessary.
Instead of placebos, the government should decisively address Napocor's ballooning losses through outright and unconditional cancellation and/or renegotiation of onerous IPP contracts.
In addition, the government should thoroughly audit Napocor's finances and expenses to identify wasteful spending and losses due to corruption.
3. Accepting the power rates increase will mean condoning erroneous policies and legitimizing onerous transactions, and bearing the costs and consequences. We cannot allow government to take the easy way out again by passing on to us the cost and consequences of its failures and mistakes. We should not be made to accept unjust arrangements as natural and legitimate.
Further, Government claims a rate hike is necessary to make the privatization of Napocor more attractive to investors. Apparently, prospective buyers want guaranteed profits when they buy and operate Napocor's plants.
The government justifies power privatization by claiming that it can no longer afford to operate Napocor due to its big losses and its ballooning debts.
It bears pointing out, however, that government will privatize Napocor by (1) assuming Napocor's debts and passing them on to taxpayers and (2) increasing its generation rates that will also be passed on to consumers.
In the end, the public will bear the high cost as well as the negative consequences of the government's power privatization policy.
This government should not remain blind and deaf to the people's plight caused by high power rates. The public's snowballing protests should make this government seriously reconsider its actions.
The different people's organizations present here today demonstrate the people's protest against power rate increase. Different sectors like the urban poor, labor, youth, women, church people, some groups in the business sector, the public sector, and some local government officials will take part in a series of protest actions.
Our protest actions will culminate on Thursday (August 26) at 7:30 pm. On this day, different communities in the cities of Manila, Quezon, Caloocan, Malabon-Navotas, Makati, Valenzuela, Las Piñas, Parañaque, and Pasay will switch off their lights and conduct a noise barrage as protest actions against power rate increase.
Parallel activities will also be held in Laguna, Cavite, and Bulacan outside Metro Manila, Iloilo City, Cebu City, and Leyte in the Visayas, and Davao City, General Santos City, and Western Mindanao in Mindanao.