Chinaman

There is something about being in the board of the Energy Regulatory Commission (ERC) that induces intense generosity. Unfortunately, the generosity comes at the people’s expense.

Yes, we are talking here about the same board that President Duterte asked to resign after an ERC executive took his own life, disturbed by corruption in the agency. The Noynoy-appointed board refused the President’s request, invoking their security of tenure.

Now another controversy has erupted involving what is called the interim Maximum Allowable Revenue (iMAR) granted the National Grid Corporation of the Philippines (NGCP). The State Grid Corporation of China now enjoys majority control of the NGCP, which in turn controls the transmission backbone that links power producers to the distribution utilities. Most of the earnings of the grid go to the Chinese company. The charges for use of the grid are borne entirely by Filipino consumers.

On behalf of the Filipino consumers, Rep. Harry Roque called for a congressional hearing on why the ERC raised the iMAR for the NGCP. We hope they get to the bottom of what happened.

By law, government is allowed to set a cap on revenues made by the grid. This is a good idea, considering the NGCP is a natural monopoly. Without the revenue cap, they could theoretically charge anything and extract billions from the hapless consumers of power. The ERC is charged with setting the iMAR.

Earlier last year, the ERC board chaired by Jose Vicente Salazar agreed to peg the 2017 iMAR for the NGCP at P41 billion. NGCP was asking for P45 billion.

Last December, while Chairman Salazar was on leave to give way to the investigation into the Villa suicide, the four other commissioners convened as a board and decided on several substantial matters. This Gang of Four are: Alfredo Non, Patricia Asirit, Gloria Taruc and Geronimo Sta. Ana. All of them were appointed to the ERC ahead of Salazar.

Absent Salazar, the Gang of Four decided to increase the iMAR for the grid by over P2 billion. NGCP’s iMAR now stands at P43.7 billion. Filipino consumers must now pay billions more in transmission charges as a consequence of that “gift” to the Chinese company that is so crucial it is overseen by the Communist Party of China.

Filipino consumers deserve an explanation why the Gang of Four at the ERC hiked an already generous profit margin for the grid. Only a congressional hearing will tease that out. But wait, there’s more. Commissioner Non disagreed with the three other members of the Gang of Four. In fact, he issued a dissenting opinion. He was not, however, disagreeing with the hike in the profit margin. To the contrary, he thought it was too small. He wanted to raise the iMAR for the grid raised to P47 billion!

The profit margin Non wanted to give the grid is P2 billion more than what the company itself asked for. We do not know what sort of calculus he used or what divine wind caused him to be so generous at consumer expense. In a public hearing, he should tell all Filipinos what drove him into such a seizure of generosity.

Unless the Gang of Four explain their generosity, they will give privatization a bad name.

As things stand, without the ERC giving private owners of the grid license to indulge in profiteering, we suffer from what is among the costliest power rate regimes in the world. The Gang of Four now wants us to cough up billions more in transmission charges.

This is not just a case of inexplicable regulatory generosity. Studied at length, a case for economic sabotage might be built from this event.

High power costs inflicted untold damage to our economy and our people. It forced our manufacturing sector to hollow out since energy costs made them uncompetitive with imports from cheap energy regimes. That hollowing out, and consequent inability to attract investments, caused massive unemployment and poverty.

Indebted

Both the SEC and the PNP leadership need to look into this matter.

Inside Camp Crame and in adjacent areas, huge tarpaulin ads are encouraging police, fire and jail officers to apply for additional pension loans regardless of how much debt they already carry. This is not just a case of aggressive marketing by savings and loan associations (SLAs) – all duly registered with the SEC. There is an amount of deceit here and an invitation to financial distress.

Retirees are told their existing loans need not be paid because the other companies are no longer authorized to deduct from PNP pensioners or are on the verge of closure. Some are told that deductions for the new loans will commence only after earlier loans are fully paid. In other cases, retirees are enticed with doubtful loan approvals that do not require a co-maker.

Several retirees victimized by these dubious offers were shocked when, after their new applications were approved, huge deductions of up to P200,000 were taken by the SLAs. The deductions, never mentioned while the loans were being marketed, were ostensibly for plane fares, board and lodging and “SOPs.”

This is clearly a racket. Those who fell for it did not know they had to pay a huge “commission” for taking on more debt. Then they will have to service the extra debt from their meager pensions for the rest of their lives.

Certainly some rule has been broken here, either concerning full disclosure or ethical conduct. Either the PNP leadership or the SEC should investigate this matter to protect those who spent their lives protecting our citizens.