Tag Archives: Freedom from Debt Coalition

[Press Release] Activists stage “pabasa” to denounce people’s suffering under P-Noy -FDC

Activists stage “pabasa” to denounce people’s suffering under P-Noy

Photo by FDC

Photo by FDC

Activists belonging to the Freedom from Debt Coalition (FDC) and the multisectoral campaign Palag Na! staged their own version of the traditional pabasa near the gates of Malacanang today to denounce the suffering caused by the “arrogant, insensitive and incompetent” administration of Pres. Benigno Aquino III.

FDC

“Since the start of the year, we have been hit with the MRT-LRT fare hike as well as multiple rate hikes for water and electricity. To make matters worse, the nation suffered collective trauma with the tragic deaths of 67 people, including 44 Special Action Force troopers in Mamasapano,” Erwin Puhawan, Officer-in-Charge of FDC said.

“As the nation takes a break to reflect on the suffering of Christ, we must also call attention to the string of suffering that the P-Noy administration, through its arrogance and ill-conceived policies, has brought upon our people,” Puhawan added.

FDC explained that the “Pasyon ng 2015” highlights the many difficulties ordinary Filipinos have had to face under Aquino.

“The P-Noy government cannot say it had nothing to do with the rising cost of mass transport, electricity and water because these are a direct result of their perpetuation of private sector-led policies in these sectors. In the same way, P-Noy cannot pass the buck with respect to Mamasapano as both the Senate and PNP Board of inquiry reports have identified him as ultimately responsible,” Puhawan argued.

The protesters included a man dressed up as Pontius Pilate, representing Pres. Aquino’s naked attempts to wash his hands of the tragic Mamasapano raid.

“Despite the mounting evidence pointing to his culpability in the tragic operation, P-Noy continues to insist on his innocence, instead pointing to underlings who either lied to him or disobeyed his direct orders. But if he thinks he is off the hook, he should think again. As the recent Pulse Asia survey showed, nearly 4 out of five Filipinos (79%) were not satisfied with his attempts to explain away his role in the tragedy, proving the old adage that “You can’t fool all of the people, all of the time,” Puhawan said.

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[Event] National Power Summit: “Lessons Learned, Challenges and Prospects for the Philippine Power Industry” – www.fdc.ph

On the 10th year anniversary of EPIRA
An initiative by
Freedom from Debt Coalition (FDC)

in cooperation with

1st Consumers Alliance for Rural Energy Partylist (1-CARE)
Association of Mindanao Rural Electric Cooperatives (AMRECO)
Institute for Climate and Sustainable Cities (iCSC)
Foundation for Sustainable Society Inc. (FSSI)
Fair Trade Alliance (FTA)

convenes a

National Power Summit

“Lessons Learned, Challenges and Prospects for the Philippine Power Industry”

Introduction

The power industry in the Philippines is at a crossroads.

With one of the highest industrial and residential power rates in Asia and in the whole world, the industry has made life harsher and harder for poor Filipinos.  Economic growth is also slow as the high cost of power has made our industries uncompetitive in the international market, the consequences of which are being shouldered by ordinary people – by workers for instance who suffer depressed wages and job losses, and by consumers who bear the brunt of high prices of goods and services.

Regrettably for over a decade, the Filipino people have not come close to savoring the taste and smell of an affordable and reliable supply of electricity. Under the pre-EPIRA set up wherein power generation and transmission were concentrated in a state monopoly, and where rural electric cooperatives tended to serve a more political than developmental (and democratic) function, rent-seeking, corruption and political patronage became the norm, culminating in the monstrosity of the Bataan nuclear power plant, the severe power shortage of the 1990s, and debts that even the World Bank found unsatisfactory.

The power crisis from the late 80s up to the early 90s was exploited by the International Financial Institutions (IFIs) and the power-brokers in Malacanañg to tap the private sector in addressing the crisis by liberalizing the entry of Independent Power Producers (IPPs) in power generation.  The supply shortage was addressed but the prohibitive cost of such cure was not told to the public until the mid-1990s.

The apparent haste of the National Power Corporation (NPC) in entering into contracts with IPPs without it seems much consideration of actual and realistically forecasted supply and demand conditions, and without prudent assessment of the risks and costs attached to such risks that NPC was absorbing in these contracts, created a new problem for the power sector. From a situation of shortage the pendulum shifted to an over-contracted supply that consumers had to pay for whether or not they were actually using the contracted capacity. This and many anomalous details in the contracts with IPPs also sank the NPC deeper into debt: US$9-B[1] of new debts arising from the purchased power contracts with the IPPs.  These onerous IPP contracts gave rise to the unjust collection of purchased power adjustment or PPA from the consumers.  From then on, PPA constituted the single biggest item in NPC’s tariff rates, amounting to not less than P3/kWh before the unbundling of rates. This quick fix solution also allowed the entry of dirty power plants utilizing fossil fuel such as coal and diesel which pollute the environment and add to CO2 emissions.

The enactment of the Electric Power Industry Reform Act (EPIRA) in 2001 has put the IFIs power reform program in the country into full motion, with privatization as its main motor and deregulation as its accelerator.  With its proclaimed mission of lowering rates and ensuring efficient and reliable energy supply, EPIRA as it has been implemented over the past ten years has resulted to more price hikes and less competition.  In addition, the newly-created Luzon grid spot market under WESM has not been spared from price manipulation as highly concentrated demand and supply conditions make it extremely profitable for the players (private and state) to exercise and abuse market power.  Moreover, injury is aggravated when consumers are rendered helpless against these abuses and manipulations as the Department of Energy (DOE) and Energy Regulatory Commission (ERC) do nothing to stop or prevent these from happening. And they continue to happen, with impunity.

The few families that dominated the power sector in the past remain as entrenched as ever if not more so, with two or three wealthy individuals and big business groups entering the fray since the passage of EPIRA in 2001. Privatization of the government’s assets has not resulted in de-monopolization and competition, but rather, higher concentration, vertically; and horizontally. This together with deregulation of generation and supply courtesy of the EPIRA has resulted in market abuse that has so far been unchecked by the regulators. And since the government’s liabilities were not privatized, we have recently learned that privatization of the assets of the National Power Corporation has done little to reduce its debts which will now be passed on to electricity consumers, rich AND poor.

Notwithstanding all these unmet objectives of EPIRA, the IFIs, government, and power-brokers/marketers contend that while reforms in the power industry may have suffered setbacks, all these are but a work in progress as actual privatization of the assets of NPC began only five years ago. Yet with privatization continuing at a more harried pace today, the future of the industry and the dream of consumers to have universal access to affordable, sustainable and reliable power, remain bleak. As far as ordinary consumers and the poor are concerned, the lights are still off.

A. Objectives:

1. To craft strong and unified positions on the government’s campaign to privatize remaining assets of NPC (Angat, Agus-Pulangi and Unified Leyte Geothermal Plant) and the rural electric cooperatives, and on the privatization of transmission

2. To develop and promote Filipino consumers welfare and interest in the power industry

  •     Affordable power rates
  •     Reliable, secure power supply
  •     Strategic and programmed democratization of ownership and control particularly in generation and distribution sectors
  •     Strategic and programmed shift towards renewable energy
  •     Active role of the public sector in transmission and in crucial power generation

B. Target participants:

1.       119 Rural Electric Cooperatives
2.       Legislators
2.1    Hon. Senator Chiz Escudero
2.2    Hon. Senator Gringo Honasan
2.3    Hon. Senator Antonio Trillanes
2.4    Hon. Deputy Speaker Erin Tañada
2.5    Hon. Congressman Walden Bello
2.6    Hon. Congresswoman Kaka Bag-ao
2.7    Hon. Congressman Michael Angelo Rivera
2.8    Hon. Congressman Salvador Cabaluna III

3.       Consumer groups
3.1    Save Angat Dam (SAD Sale)
3.2    Coalition of Consumers for the Deferment of the Privatization of the Tongonan Geothermal Power plants (UNIFIED Leyte)
3.3    PALAG Mindanao
3.4    FDC Local chapters (Ilo-ilo, Cebu, Negros, Evis, Davao, Westmin, Gensan)

4.       Business groups (c/o FTA)
5.       Associations and unions under REC’s (c/o APL, PM, NSU-NSA)
6.       Department of Energy (DOE)
7.       Energy Regulatory Commission (ERC)
8.       Power Sector Assets and Liabilities Management Corporation (PSALM)

C. Concept and description of activities:

Day 1 – Pre-Summit (Public Forum and Focus Group Discussions)

  •     Morning session – Public Forum sponsored by the University of the Philippines-National Engineering Center

Lessons Learned – “Dissecting the Anatomy of EPIRA”

  •     Afternoon session – Breakout Groups (Focus Group Discussions)

Challenges – “Moving beyond the failures of EPIRA: Recommendations and other measures”

FGD (Session 1) – How to reduce power rates in the Philippines?
FGD (Session 2) – Solutions to NPC debts: Some recommendations
FGD (Session 3) – Making power industry more efficient, reliable and secured
FGD (Session 4) – A Viable and Democratic REC’s
FGD (Session 5) – What kind of regulation do we need and how?
FGD (Session 6) – Renewable Energy: Moving Forward

Day 2 – National Power Summit

Prospects

  •     (Moring session) – A Sustainable Framework for Electric Cooperatives in Regulated Public Utilities
  •     (Afternoon session) – Citizen’s report and recommendations on Power Industry – Multi-stakeholders gathering

[Press Release] EPIRA a “massive failure” – FDC

MANILA, Philippines – For not succeeding in achieving its objectives of reducing the debts of the National Power Corporation (NPC) and bringing down the power rates in its 10 years of implementation, the Electric Power Industry Reform Act (EPIRA) is a “massive failure,” according to the Freedom from Debt Coalition.

FDC issued the statement echoing the opinion of Senator Joker Arroyo who said that “EPIRA is a failure” during a public hearing of the Joint Congressional Power Commission (JCPC) last Thursday at the Senate.

The advocacy group asked the JCPC to compel the NPC and the Power Sector Assets and Liabilities Management Corporation (PSALM) to make public their financial statements. PSALM is the agency in charge of selling government power assets.

FDC secretary-general Milo Tanchuling, who participated in the JCPC public hearing, stressed that after ten years since EPIRA was passed the power rates have increased and the total amount of NPC debts have remained virtually the same.

He explained that the figures presented by PSALM showed that the NPC’s debt and other financial obligations stood at US$16.387 billion in 2001 when EPIRA was passed. At the end of 2010, it amounted to US$15.821 billion, or a difference of only US$500 million.

“With regard to the basic generation rates of NPC, there have been two rounds of increases since EPIRA was approved, first in 2005 when NPC was granted a P1.03 per kilowatt per hour (kWh) increase and in 2009 when NPC was again granted increases of P0.4682 per kWh in Luzon, P1.1460 per kWh in the Visayas and P0.7147 per kWh in Mindanao,” he said.

Tanchuling said during the JCPC public hearing that his organization was “dismayed by the fact that the huge debts of NPC have remained in spite of repeated power rates increases and power adjustments under EPIRA which were all shouldered by ordinary consumers, not to mention the burden of additional taxes used to invest in the NPC power plants—most of which have now been sold supposedly to pay the NPC debts.”

“It was clear that, EPIRA did not provide for any substantial and meaningful renegotiation of NPC’s contracts with independent power producers (IPPs), even though these contracts require NPC to purchase electricity whether or not these are actually generated or dispatched, and to supply fuel to IPPs that are in operation. The price NPC agreed to pay for this electricity was overstated to begin with, and many of these contracts have clauses that allow the IPP to raise rates over time,” he pointed out.

Tanchuling noted that EPIRA’s failure to meet these two objectives were also the reasons mentioned by Senator Arroyo during the JCPC meeting for the failure of the EPIRA.

Tanchuling proposed to the JCPC that NPC and PSALM should release their annual financial statements to the JCPC so that the public may know why NPC’s indebtedness was not reduced even after selling the bulk of its assets, hiking its generation rates twice and, on top of these, receiving regular payments of its so-called deferred accounting adjustments through the Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustment Mechanism (ICERA).

“Moreover, a debt audit of the NPC debts and financial obligations is needed to determine if these were contracted under fair terms and conditions, and then used wisely and prudently. The Filipino people will also have a solid basis to demand the repudiation of any onerous debts and financial obligations of NPC,” he added, “which if passed on to electricity consumers and taxpayers would be a grave injustice.”

Press Release
Contact Person: Milo Tanchuling
Tel. No. (02) 921-19-85