In the line of fire

A few days back, this column sounded the alarm on a possible triple whammy staring power consumers in the face.

The first whammy, we said, was the increase in the generation rates charged by the National Power Corp. or Napocor. The increase, the second in less than a year, was allowed by the Energy Regulatory Commission or ERC to enable Napocor to reach a level of profitability required by its creditors.

The second whammy might just happen within this week. Our Palace sources say the President might sign the expanded value added tax law (EVAT) this coming week. That means Napocor and other power producers will soon be passing on an additional 10 percent increase to hapless power consumers all over the country.

The third whammy is the possible demise of lifeline discount rates, the reduced charges that marginal power users enjoy. This benefit, given to those using up only 100 kilowatts per month or less, might disappear forever if the Supreme Court upholds a Court of Appeals ruling junking the unbundling of power rates.

So, there you are. Three whammies that spell real hardship for the balance of the year.

Up to this point, the power consumers are yet to see a way out of the whammies. It looks like we will have to bite the bullet at this point and really just pitch in for the salvation of Napocor.

In the meantime, let us all pray that relief may come soon.

But perhaps, more prayers will be said by the 119 or so rural electric cooperatives all over the country.

These power co-ops will be on the line of fire as soon as the Napocor rate hike and the passed on value added tax are reflected in the monthly electricity bills. They will have to take the cudgels for Napocor.

These power co-ops, however, are lucky. The pillar of the country’s rural electric cooperatives sector happens to be a man of the cloth, Fr. Francisco Silva, former head of the National Electrification Administration. He is now a Presidential Adviser.

Fr. Silva is perhaps one of the most respected and most credible public servants in the country today. Politicians dare not cross his path. Mediocre personnel are terrified by his presence. Crooks cannot even mention his name. Together with his successor, iron lady Edith Bueno, Fr. Silva overhauled the rural power sector and transformed it into a showcase of genuine cooperation among people.

The transformation was vital because rural electric co-ops are the most dominant retail supplier of electricity in the country, even bigger than the Manila Electric Co. or Meralco. Rural power co-ops account for more than half of all household connections in the country. More than 60 percent of all potential household connection are in their franchise areas, not in Meralco’s which only has about 30 percent of national potential connections.

This makes it more difficult for rural power co-ops. They will be facing more households, more irate housewives who would be oblivious to explanations as to why their monthly power bill has soared.

We heard some horror stories in this regard. When ERC gave Napocor its first rate increase last year, bill collectors of rural power coops were scolded, insulted even threatened by their customers who refused to understand that the astronomical figure in their power bill was caused by Napocor, not by the power coop. We expect a repeat of this unfortunate scenario.

In more ways than one, rural power coops will be in the same boat at Meralco. Meralco has taken the beating in Metro Manila media for Napocor rate hikes. This is because people need an outlet for their ire. And Meralco and power co-ops happen to be the frontliners. And the frontlines are the lines of fire.

This is perhaps one of the reasons rate unbundling has to be saved. With unbundled rates, we will continue to see who is hiking which rate component of the peso figure we see in our bill.

Napocor is fortunate it does not have to directly face the angry public. When the new round of increases are reflected in our bills, many will take up the heat for them. Among them, the unassuming Energy Secretary Raphael Lotilla, the bill collectors of the 119 rural power co-ops, Meralco and its meter readers, and so forth. Napocor will not be blamed; it will not hear the voices of an irate public.

Public anger, it seems, cannot be unbundled. It is dished out lump sum.

Big Trouble

Leonardo Bags may be in deep trouble if it doesn’t watch out.

The company owes more than P3 million to a Chinese friend. True, it issued post-dated checks as payment but every time these are deposited, they bounce.

The Chinese friend has been very lenient, understanding and patient even if six months have passed and not one of the checks turned good.

What got the ire of the Chinese creditor is that Leonardo had the guts to renew the contract of Kris Aquino as its celebrity endorser for a whopping P4-million talent fee!

Business ethics dictate that before one goes to a spending binge as a way to "fool" customers that the business is doing well, pay your debts first. As they say "you can fool some of the people all the time but you cannot fool ALL the people all the time."

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