Why were power plant repairs timed during Christmas?

What is the quality of our current congressmen? Judge for yourself:

1. Valenzuela Rep. Magtanggol Gunigundo has filed a bill that would give Manny Pacquiao tax exemption for the rest of his life.

2. A group of partylist congressmen led by Buhay Rep. Lito Atienza has filed a similar bill giving Pacquiao and other athletes who win in international tournaments tax exemptions, retroactive to 10 years. If passed, that bill would make the earnings of Pacquiao et al., in the past 10 years, tax exempt. Taxes they already paid would have to be given back to them in the form of tax credits.

3. Oriental Mindoro Rep. Reynaldo Umali (Liberal Party) said he would file an impeachment complaint against justices of the Supreme Court for declaring unconstitutional the Priority Development Assistance Fund or pork barrel, a rich source of kickbacks for members of Congress.

Those are the kind of congressmen we have now, those we the taxpayers are paying fat salaries and allowances.  Nakakahiya!

Gunigundo, Atienza, et al. want to give special treatment to Pacquiao, also a congressman from Sarangani. Pacquiao was caught by the Bureau of Internal Revenue (BIR) allegedly trying to cheat on his taxes. Now some of his fellow congressmen want to reward him with a tax amnesty, retroactive to 10 years, and a lifetime tax exemption.

What is it that Pacquiao could have promised them: Share and share alike? Your guess is as good as mine, considering what it is that makes congressmen move.

Curiously, Pacquiao has no comment on these twin bills that would benefit him immensely. An upright and unselfish citizen would have said, “No, I do not want a lifetime tax exemption, just an accurate assessment of my tax liabilities.” But no such reaction came from Pacquiao.

Some people suspect that it could have been Pacquiao himself who urged his colleagues to file the bills, with a promise of rewards later. These are the kind of congressmen we have elected? Now you know whom you should not vote for in the 2016 elections.

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Faced with the anger of the people over the power rate increases that would make our electric rates the highest in the world, Meralco has decided to stagger the rate hike.

Not good enough, said the consumers. The power sector would still make a killing at the expense of consumers. The Philippines used to have the second highest power rate in Asia, next only to Japan. But it has surpassed Japan and now has the highest rate in the world. Our country now belongs to the Guinness Book of World Records.

The P3.50/kWh increase will raise the present P12.46/kWh rate to P15.96, a 28-percent increase.

For industries, where power already constitutes 45 to 55 percent of operational costs, the increase will greatly affect their business viability.

For residential consumers consuming 200 kWh per month, the increase would mean an additional P830.

But for the power sector, it would mean an additional P676-million profit per month. Wow!

Why is it necessary to raise the electricity rates? According to press releases from the power sector, it is because of the maintenance shutdown of the Camago-Malampaya natural gas pipeline and the simultaneous maintenance shutdowns of several power plants.

“It is necessary to shut down these power plants and the pipeline for maintenance and repairs,” said the press releases. “If these maintenance shutdowns don’t follow the schedule, it could mean bigger and longer repair/maintenance for the plants and pipeline, which will ultimately lead to blackouts and brownouts all over Luzon and Metro Manila.”

Nagkaisa, the coalition of labor associations, slammed the increases, saying that the shutdown of several power plants and of a pipeline at the same time has a malicious intent.

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

Based on First Gen’s submission to the Philippine Stock Exchange 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.

There is collusion among generation companies. The Electric Power Industry Reform Act was set up to encourage competition among the power companies to drive prices down. As we now see, the rates did not go down, instead they have been going up. The Malampaya shutdown was made to drive prices up at the Wholesale Electricity Spot Market. There is a cartel in the power sector.

This is also a failure of governance, said Nagkaisa. “The government, particularly the Department of Energy, should not have allowed the artificial shortage as a result of the simultaneous shutdowns of power plants.”

And, I ask, why were the simultaneous maintenance shutdowns timed during the Christmas season when there is a marked increase in electric consumption? These are scheduled way in advance. Why were they not scheduled after Christmas, in February, when the demand for electricity is lower?

Before the new Performance-Based Rate-making (PBR) tariff was implemented, Meralco made only an annual net profit ranging from P3 billion to P6 billion. Under PBR, in 2012 Meralco declared a net income of P16.25 billion. In 2013, Meralco expects a consolidated net income of P17 billion.