Freedom from Debt Coalition ( FDC ) calls on Congress to revoke the legislative franchise of MERALCO so as to end its monopolistic hold on the electric power distribution in Luzon with its consequent predatory pricing, market abuse and other malpractices that harm not only the consumer public but even the government. This should give way to a more democratic power distribution set up that can provide the consuming public affordable rates and quality and stable supply of electricity.

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Today, January 29, 2014, Freedom from Debt Coalition (FDC)  will present its position paper to the Department of Energy‘s Focus Group Discussion on the EPIRA  Review to be held at the Legend Villas, Mandaluyong City.  FDC will participate in the interest of public discussion of public issues and in exercise of critical engagement of civil society organizations with Government.  FDC will be represented by its President,  Ricardo “Ric“ B. Reyes.


 

A brief summary of FDC position paper is as follows:

Since the bill that became EPIRA was deliberated on the Congress floor, FDC has strongly opposed it. FDC has warned Congress and our people again and again, year after year, that privatization cannot deliver the promises of EPIRA. On the contrary,  EPIRA would drive the power industry down to perennial crisis.  Now, thirteen (13)  years after its enactment,  EPIRA is one big broken promise.

EPIRA’s Declaration of Policy from Policy A to K (Section 2) is in shambles.  Instead of “ transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability “(Section 2-C) we have the highest residential electricity rate in Asia and the fifth highest in the world and the second highest industrial electricity rate in Asia.  At the rate power hikes occur in our country, we might end up having the most expensive electricity in the world.

 

After 13 years of EPIRA,  

-  “Instead of free and fair competition “The power industry fell nto the   hands of a monopsony of the big 3– First Gen ofLopez, Aboitiz Power and San Miguel Power for power generation, a  monopoly of MERALCO in  power distribution and the control by a private company NGCP of the transmission sector which is owned by Henry Sy and the Chinese government
-  Planning of the power industry has been abdicated by the Government to the private sector. If the private generation companies are not willing to invest into more power plants, or if there are no takers from the private sector, the government under EPIRA does nothing.  
-  The monitoring of the power supply and the upkeep of the transmission sector is transferred into the hands of a private company, Henry Sy’s NGCP which is co-owned by the Chinese government.
-  The  power spot market ,WESM, that was established to promote competition to lower electricity prices has become an easy arena for gaming by big three generation companies who control more than 60 percent of the country’s installed and dependable capacity and by Meralco who also sells its contracted power supply. It is a contrived market where prices are high.
-  The central regulatory body, the Energy Regulatory Commission, has become a classic case of regulatory capture by the generation monopsony and  the monopolies in the distribution and transmission sectors.
-  MERALCO’s long-time monopoly of power distribution in Luzon has given it free rein  to commit predatory pricing and market abuse, apart from a long list of examples of corporate greed.


The shift to sustainable energy is very slow and is in real danger of being controlled by again by the big 3, foreign investors and other private corporations.


Electric cooperatives, instead of being assisted and conditioned to democratize and be  efficient are pressured to privatize with the big 3 and other foreign companies waiting to take hold of them.


In sum, FDC has been calling all these years for (1) breaking the private monopolistic/monopsonistic hold of a few big private corporations on the power generation, transmission and distribution  industry brought about by EPIRA, (2)  bringing back State planning in building and developing the power industry, (3)  restoring the role of the State as a major player in both generation and distribution sectors and renationalizing the management and operation of the transmission sector, (4)  promotion of democratic and efficient electric cooperatives as a social partner of the State in developing the power industry, and (5) ensuring a steady and sure transition to sustainable energy.


While some of these issues may be addressed by certain amendments, so long as the power industry is privatized and under the sway of private monopsony and monopoly which is what EPIRA in substance did,  these amendments will be rendered inutile and meaningless. FDC believes that nothing less than the REPEAL OF EPIRA  and the institution of public control over the power industry is the rightful path to a secure, safe, efficient and affordable energy to our people.

Energy Regulatory Commission (ERC) Chair Zenaida Ducut must go.  But Freedom from Debt Coalition (FDC) asks: why only Ducut?  ERC is a collegial body and its decision to go along with the record-high P4.15 kwh MERALCO rate hike without seriously and diligently inquiring into its basis makes the ERC as a body and all commissioners for that matter responsible and accountable. What the ERC needs at the moment is a TOTAL REVAMP.  In their place, persons of probity, integrity and competence, including a legitimate representative from the consumers should be appointed.

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REPEAL EPIRA, REVOKE THE MERALCO FRANCHISEAND PUT THE POWER INDUSTRY UNDER PUBLIC CONTROLfor a more enduring and wholistic solution

 

The other day voices were raised from the House of Representatives asking for an emergency solution to the failure of the privatized power industry to provide affordable and secure supply of electricity to our country.

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Citing possible cartelization or combination by several power firms which led to Meralco’s sharp increase in generation charge this month, a group of lawmakers and social activists filed before the Department of Justice (DoJ) this morning, a petition asking the Office for Competition to conduct an inquiry into the matter.

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