Power to the People: Shedding light on PH’s privatized energy industry (Part 2 of 2)

read Part 1 here.

image from change.org

image from change.org

In his cross-examination, SC Justice Antonio Carpio criticized Meralco for its “price-fixing”, saying that it is in direct violation to provisions in the EPIRA law stating that only the actual cost of electricity from generation firms should be passed on to consumers. To which Meralco countered that, also under the EPIRA, it is granted the authority to automatically pass on to consumers any corresponding increases in generation charges according to closing prices in the power market. It also argued that, under the EPIRA and its implementing rules, it abided with WESM rules and any increase was legal for as long as it got the consent from the ERC.

Both the ERC and Meralco, in their arguments, cited Sections 6 and 29 of the EPIRA law that categorized power generation and supply as “not being public utilities and therefore not subject to government regulation”. Their counter-argument to the Makabayan bloc’s petition is that, under the EPIRA, any rate hikes are under the discretion of the ERC and not the SC.  If the SC accepts this, the TRO is as good as lifted.


So it has now boiled down to this: No power rate increase, no power.  The Philippine government is powerless to stop incessant and exorbitant electricity rate hikes because of a law that virtually allows control of the power industry by the private sector. The power industry is monopolized by a few big companies who has transformed the power sector into one of the country’s most lucrative businesses.

Meralco is the biggest power distributor, the major provider of electricity to 22 cities and 89 municipalities, and the sole distributor in the National Capital Region. To date, it boasts of an estimated five million client-consumers. It is also the Top 1 in the country’s top 1,000 corporations.

Aside from MERALCO, the country’s power industry is otherwise dominated by familiar players. Fifty-two percent of the country’s power is manufactured, sourced and distributed by only three big power groups: Meralco, owned byManny Pangilinan and the Lopezes; the Aboitiz Group who owns majority of generation companies in Visayas and Mindanao, among them Therma Mobile; and, San Miguel Corporation of the Cojuangcos, incidentally also equally-powerful relatives of Pres. Aquino. Power producers connected or affiliated with San Miguel, the Lopezes and the Aboitiz Group control 55 percent of the power supply at WESM.

Because of the power industry’s monopilistic nature, any of these players can dictate market prices and constrict power supply at whim. Because of the EPIRA, they are given license by law and by government agencies to do so. Because the government has sold almost all of its public-owned power plants to private corporations, it has no means to fill up artificial shortages created by these power corporations and are literally at their mercy – if not, as protesters and some legislators allege, outrightly conniving with them so as not to further jeopardize national economy by antagonizing the very same players on which it is highly dependent for domestic consumption and basic services.

Let there be light

The latest Meralco power rate hike has brought on calls to repeal the EPIRA law anew. Protesters in court and in street rallies are questioning not only the recent hike but also the privatized and monopolized state of the power industry.

Agham, an organization of patriotic, pro-people science and technology advocates, has long-ago proposed that government increase its role in the power sector by buying back transmission lines and previously-owned power plants. “This should make up for the short-sighted privatization policy and enable government to regulate utility prices more effectively,” said Dr. Giovanni Tapang, AGHAM national chairperson and professor of Physics at the National Institute of Physics at the University of the Philippines.

People’s organizations have also called for the nationalization of the power industry as a way of generating the country’s capacity to utilize its own resources and ensure self-sufficiency. The main problem is that the response of the government to the perennial power crisis is not to build necessary facilities and infrastracture to meet the demands of the public but instead to contract out power generation to private generation companies and producers. It has completely privatized the power industry and abandoned all responsibility in providing electric services to the people.

The EPIRA law was precisely designed not for the benefit of consumers and the national economy but to attract private investors. The Philippines, though very rich in energy and other natural resources, has the most privatized and inaccessible basic services to the Filipino public. The country’s privatized power industry has only resulted in ever-increasing power rates, the plunder of natural resources and the foreign domination of private capital over the power industry and the country’s national economy. Worse, it has displayed the Philippine government’s connivance with and staunch subservience to the pressure and dictates of huge foreign banks and financial institutions in implementing neoliberal policies of privatization, deregulation and denationalization of basic services and industries.

Electricity, as a basic service, should be provided to the people. It is also a vital sector in genuine national industrialization. The government’s perpetual excuse of lack of funds to build,operate and sustain power plants is unacceptable – especially now in light of the pork barrel scam and massive corruption in government.

Granted, the present Aquino government may be deemed inefficient and corrupt, making it incapable of running its own public power industry. The demand therefore to nationalize the power industry should go hand-in-hand with the movement for good governance, transparency, accountability, social justice and the clamor for a government that truly represents and upholds the interests of the general public. Power to the people, right on.


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