|
Just the
other day the Manila Electric Co. (Meralco) announced
another hefty increase in power rates for this month.
The rate increase, according to the computations of a
morning daily, would be equivalent to P149 (which
otherwise can buy 4 kilos of commercial rice), if you
happen to be a residential consumer using up to only 200
kilowatt-hours (kWh) a month, that is.
As
always, this is a take-it-or-leave-it power-rate
increase. Meralco’s 4.2 million customers are expected
to meekly accede to this rate increase no matter what
they think, or however badly they may feel about it. If
they don’t, or simply can no longer, pay, they know they
will only be mercilessly cut off from civilization.
We are
Meralco’s hapless captive market. We can only pray such
rate increases don’t happen too often, for the love of
Thor (isn’t he also the designated Olympian god of
electric power?) or whoever.
Meralco,
in a press statement, is blaming increases in generation
and transmission costs and a bigger system loss
amounting to an average of 82.23 centavos per kWh, an
amount that it says it is merely passing on to its
customers without any markup. In typical Meralco-speak,
it once again used that worn-out line that, “Meralco
never gains a single centavo from changes in the cost of
power supply that it passes on to its customers.”
But why
is it that Meralco subscribers never find it easy to
believe whatever it has to say to its customers?
Pummeled by a seemingly endless series of rate
increases, its customers are now too punch-drunk to
cling to the idea that the Lopez-owned utility firm
exists to serve them as mandated by its franchise. Its
credibility is so low that whenever it tries to
sugar-coat a rate increase, the public’s distrust only
deepens.
Which
brings us, by the way, to the issue of the system-loss
charge Meralco has been imposing on its customers since
the Lopez family regained control of the giant utility
in 1986. The issue was one of those raised by Elpi Cuna,
Meralco vice president and spokesman, in a letter to me
just last week in answer to my recent columns about
Meralco’s continuing attempts to maximize power rates.
Technically, what constitutes the “system loss” that we
Meralco customers are religiously paying for is the
total amount of electricity lost every month in
Meralco’s distribution system. Such losses are incurred
through thievery (illegal connections, use of jumpers
and tampered meters, etc.) and leaks and spills caused
by defects in the cables and transformers. (Consumer
watchdogs are also claiming, by the way, that Meralco
itself consumes at least 1 percent of the electric power
it is distributing for its own administrative
requirements. Is this also being charged to Meralco
customers as part of the “system loss”?)
The
particular portion of Cuna’s letter that dwells on the
system-loss issue runs as follows:
“. .
.You said that a 15.6-percent system-loss charge on
large residential and commercial customers and a
15.4-percent return-on-rate base are now part of
Meralco’s regular billings to its customers.
“That is
absolutely false. We are not recovering a system loss of
15.6 percent in our charges to our customers. Under the
law [Republic Act 7832], we are only allowed to pass on
an average 9.5-percent system loss to our customers.
Losses to serve customers vary, with primary-metered
customers incurring lower losses compared with those
served as secondary who are mainly the residential and
small commercial customers. System-loss charges are thus
correspondingly structured. Never has there been
system-loss recovery for any customer group at 15.6
percent.
“In
fact, the cost of system loss beyond the 9.5-percent cap
is shouldered by the company. If it is any consolation
to you, Meralco has already shelled out billions of
pesos in shouldering these excesses in the system-loss
cap. . . .”
I’m
afraid Mr. Cuna is being less than forthright here. I
can show that Meralco has made most of its customers pay
much more than the legal limit of 9.5 percent.
But
before we go into that, Pete Ilagan, president of the
National Association of Electricity Consumers for
Reforms (Nasecore), points out that even a 9.5-percent
system loss is much too high by world standards. It
shows Meralco has not done much to improve its
efficiency despite the billions it has been raking in.
He says the really efficient power-distribution
companies in the world have kept down their system
losses to not more than 6 percent. Yet, here is Meralco,
continuously charging its customers for a 9.5-percent
loss. In effect, it does not see any need to improve its
efficiency since its customers are subsidizing its
inefficiency anyway.
Nasecore
is the vigilant consumer watchdog group in the local
power industry that has successfully checked some of
Meralco’s attempts to overcharge its customers in the
past. It is a consistent oppositor and intervenor in
Meralco’s endless petitions for rate increases.
Now,
back to the question of whether or not Meralco’s
customers are being made to pay more than the legal
limit. Mr. Cuna claims Meralco has been charging its
customers not more than 9.5 percent for its system
losses in accordance with the statutory limit.
“Primary-metered customers” (he means industrial and
large commercial establishments) are charged lower
(reportedly only 7 percent, but Cuna doesn’t say how
much) and the secondary-metered customers (he means
residential and small commercial establishments using
300 kWh or more a month—the bulk of its customers) are
obviously charged higher. The average is, therefore, 9.5
percent—at least that’s what Cuna is claiming.
Meralco
is telling us it has different categories or brackets of
customers—depending on their consumption range. Each
bracket is charged differently for its system loss. As I
understand it, there are at least three such brackets of
consumers, including the poorest group of consumers,
that use up 100 kWh or less a month.
In other
words, Meralco has a “soup” of different system-loss
charges, but apparently the recipe is kept a secret. My
problem is Cuna’s claim that “never has there been a
system-loss recovery for any customer group at 15.6
percent.” This is what I seek to dispute.
For the
benefit of the residential and small commercial
customers who never get to check the details of their
monthly bill, either because they get a migraine or,
worse, pass out just by looking at the total amount
due—the system-loss charge is the third item under
“billing summary.”
The
first item is the generation charge, the second is the
transmission charge. According to a supervisor in
Meralco’s accounting department, determining the actual
percentage of the system-loss charge you are paying
every month is no big deal. He says the system-loss
charge is a percentage of the generation charge.
Therefore, by simply dividing the system-loss amount by
the generation-charge amount, and then moving the
decimal point two places to the right, you get the
percentage of system loss being charged.
The
point is crystal clear. The system-loss charge is a
percentage of the generation charge.
How,
then, could Cuna say in writing that “never has there
been a system-loss recovery for any customer group at
15.6 percent?” Is a “puzzlement,” I tell you.
When I
checked my own bills at the office (which is bracketed
as a secondary-metered or small commercial customer) for
the billing periods January 19 to February 19 and
February 19 to March 18, I was amazed to discover that
Cuna was technically correct.
The
system-loss charges for both months were, indeed, not
15.6 percent. They were actually 6.62 percent and 16.8
percent, respectively. That’s a sizeable amount
considering that my office has been paying Meralco an
average of P23,000 every billing period.
Not
satisfied, I called up a number of similarly situated
friends (in the secondary-meter bracket) and asked them
to check their own bills to see how much their actual
system-loss charges were. All came back with the same
thing—their system-loss charges for the first months of
the year never dipped below 16 percent.
In
fairness to Meralco, I would like to ask our
readers—especially those with monthly consumptions of
300 kWh or more—to fax to my office their recent Meralco
bill and their own computation on the system-loss
charge. It’s like playing a little game, only this is
serious because it’s about the precious earnings we have
to part with every month just to keep Meralco happy.
We will,
of course, keep your identity confidential and release
only the numbers for the public’s guidance. Who
knows—the exercise could lead us eventually to a clearer
understanding of all the mumbo-jumbo that you read in
your monthly Meralco bill.
So, how
much in system-loss charges have you been paying Meralco?
Play along and send a copy of your bill and computation
to (attn Omerta) fax no. 844-4464.
Omerta_bdc@yahoo.com |
