Ami­ca­ble

The Philippine Star - - OPINION - ALEX MAGNO

When ele­phants brawl, the ants must be pro­tected. Res­i­dents of Iloilo City are deeply anx­ious over the pos­si­bil­ity the tran­si­tion from one power dis­trib­u­tor to an­other could be messy. The highly pro­gres­sive city will face dis­rup­tions in its power sup­ply un­less the old con­ces­sion­aire and the new one get to­gether and plan an ami­ca­ble tran­si­tion process.

The old con­ces­sion­aire, Panay Elec­tric Com­pany (PECO) en­joyed the dis­tri­bu­tion franchise for 97 years. The franchise it holds ends this month. Cus­tomer com­plaints, in­clud­ing the lo­cal gov­ern­ment, con­vinced Congress not to re­new the franchise and award it in­stead to a new player.

PECO had not rein­vested in mod­ern fa­cil­i­ties. For a while, it was sell­ing the most ex­pen­sive elec­tric­ity in the world. Power sup­ply was un­re­li­able. Cus­tomers were fre­quently is­sued er­ro­neous billing state­ments due to the an­ti­quated sys­tem. The abil­ity of Iloilo to sus­tain its eco­nomic growth was com­pro­mised.

Both the House of Rep­re­sen­ta­tives com­mit­tee on leg­isla­tive fran­chises chaired by Rep. Franz Al­varez and Se­nate com­mit­tee on pub­lic ser­vices chaired by Sen. Grace Poe agreed there was good rea­son to trans­fer the power dis­tri­bu­tion franchise to a new player, MORE Elec­tric Power Corp. con­trolled by busi­ness ty­coon En­rique Ra­zon Jr.

The con­sol­i­dated bill award­ing the franchise to a new player now sits on Pres­i­dent Duterte’s desk. Since the power to award fran­chises rests with the Congress, the sign­ing should be a for­mal­ity. PECO’s ex­ist­ing franchise ex­pires on Fri­day, Jan. 18.

For its part, MORE an­nounced it was ready to put in the bil­lions re­quired to fully mod­ern­ize elec­tric­ity dis­tri­bu­tion ser­vices in the Iloilo ser­vice area. This should im­prove re­li­a­bil­ity of the power sup­ply and dra­mat­i­cally lower sys­tems loss that should re­sult in cheaper elec­tric­ity.

Dur­ing its time, PECO sourced only 1.05 per­cent of the power it dis­trib­uted from the whole­sale elec­tric­ity spot mar­ket, negat­ing the ad­van­tages pre­scribed by the Elec­tric Power In­dus­try Re­form Act. MORE Power pres­i­dent Roel Cas­tro, a vet­eran in elec­tric­ity sup­ply dis­tri­bu­tion, an­nounced his com­pany would pur­chase the bulk of its elec­tric­ity from the spot mar­ket.

Cas­tro like­wise an­nounced his com­pany was pre­pared to com­pletely take over man­age­ment and op­er­a­tions of power dis­tri­bu­tion ser­vices in the Iloilo area by May. He of­fered PECO eq­ui­table com­pen­sa­tion for its as­sets and promised to hire the ex­ist­ing work­force of the out­go­ing dis­trib­u­tor. The last item should calm fears of la­bor dis­lo­ca­tion due to the trans­fer of the franchise.

The trans­fer is un­prece­dented. This is the first time a ma­jor power dis­tri­bu­tion franchise is be­ing trans­ferred to a new player. If the tran­si­tion pro­ceeds smoothly, this will en­cour­age fu­ture trans­fers of franchise from in­ef­fi­cient awardees to more ef­fi­cient play­ers. At the very least, what hap­pened in this case should en­cour­age other franchise awardees to shape up and be com­pet­i­tive.

Too many franchise awardees tend to work less ef­fi­ciently, en­joy­ing the monopoly a pub­lic ser­vice franchise gives with­out do­ing what is best for their con­sumers. The case of Iloilo will send a clear sig­nal across the en­tire power in­dus­try.

The op­ti­mistic time­line MORE fore­casts will hap­pen only with the full co­op­er­a­tion of the out­go­ing dis­trib­u­tor.

To be sure, PECO is not happy with the non­re­newal of the franchise they en­joyed for nearly a cen­tury. But a pol­icy de­ci­sion that will re­dound to the ben­e­fit of con­sumers has been taken. They should help en­sure a smooth turnover with the best in­ter­ests of con­sumers at heart. Shut­down

The trade war with China is not the only un­cer­tainty Don­ald Trump in­flicts on the rest of the world. The par­tial shut­down of the US gov­ern­ment, be­cause the Congress would not yield to Trump’s im­pe­ri­ous de­mands for fund­ing a bor­der wall, will now cre­ate eco­nomic rip­ple ef­fects the Amer­i­can pres­i­dent had not prop­erly cal­cu­lated when he be­gan his game of bluff and blus­ter with his own leg­is­la­tors.

The par­tial shut­down is now on its fourth week, longer than any other pre­vi­ous such in­ci­dents. There is no deal on the ta­ble for the Amer­i­can pres­i­dent and the leg­is­la­tors to agree on. This shut­down could go on for a very long time.

About 800,000 fed­eral gov­ern­ment em­ploy­ees are not get­ting paid dur­ing the shut­down. The small en­ter­prises that cater to them are now feel­ing the loss of con­sumer spend­ing. Soon, many of these em­ploy­ees will de­fault on their mort­gages and max out their credit cards with no means to set­tle debts. They will be a black hole in the Amer­i­can fi­nan­cial sys­tem, be­gin­ning from a small tear and grow­ing into the eye of a fi­nan­cial and po­lit­i­cal storm.

Trump’s ego is on the line here. He promised to de­liver a wall on the 2,000-mile bor­der with Mex­ico, no mat­ter this is the most in­ef­fi­cient way of en­sur­ing bor­der se­cu­rity. Iron­i­cally, il­le­gal im­mi­gra­tion from Latin Amer­ica is at its low­est in decades and Amer­ica’s drug prob­lem con­sists largely of opi­oids made in China.

Be­cause his ego is on the line, it is dif­fi­cult to ex­pect ra­tio­nal cal­cu­la­tion from this man. Here is a char­ac­ter ob­sessed with hav­ing his name at­tached to large ed­i­fices.

No one knows how this un­war­ranted cri­sis will end. The Democrats, who con­trol the US House of Rep­re­sen­ta­tives, and who have power over the purse, refuse to be bul­lied by the most er­ratic and in­fan­tile pres­i­dent the US ever had. They stand on the solid grounds of moral­ity, prin­ci­ple and ra­tio­nal­ity.

The rest of the world can only wring their hands, un­able to in­ter­fere in what is a do­mes­tic Amer­i­can con­cern. But the shut­down is only one of a con­stel­la­tion of dis­as­trous poli­cies this chaos-prone pres­i­dent has un­leashed on the rest of us.

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