* This is my column in BusinessWorld on September 06, 2018.
INFLATION has further jumped to high levels. Only 2.9% in
December 2017 (no TRAIN law yet), it became 3.4% by January 2018 (first month
of TRAIN law), 3.8% in February, 5.7% in July, and now 6.4% in August 2018.
While high world oil prices and peso depreciation against
the US dollar were among the important factors, it was the energy tax hikes in
the TRAIN law — oil, LPG, coal, plus coverage of VAT in electricity
transmission charge — that triggered and sustained the inflationary pressure.
And talking about inflation and energy prices, the recent
Pulse Asia Research’s “Ulat ng Bayan Survey,” June 15-21, 2018 is among the
misleading surveys that will indirectly justify higher electricity prices. How?
See two of their three questions, loaded and leading:
1. How satisfied or dissatisfied are you with the price
of your electricity?
3. Are you in favor or not in favor of increasing the use
of renewable energy in the Philippines such as energy from the sun or solar
energy?
On #1, Pulse Asia did not explain to respondents that
there are nine different charges in our monthly electricity bill that
contribute to higher overall rate: generation charge, transmission charge,
distribution charge, supply charge, system loss charge, metering charge,
universal charge, feed-in-tariff (FIT) subsidies, taxes. Loaded question with
an expected high answer of Dissatisfied.
On #3, another loaded question as it does not clarify
that even with more solar energy, the eight different charges will remain and
worse, the FIT subsidy for solar will further rise.
So the result of their survey was: Question #1, 64%
dissatisfied and only 27% satisfied, 14% undecided. Question #3, 89% in favor,
9% not in favor and 2% volunteered/undecided.
Having more intermittent, unstable and unreliable solar
and wind power in the national grid can lead to higher prices because of the
higher need for backup power, ancillary services that are mostly oil-based, and
huge batteries. This is shown in both Europe and the US where in many cases,
countries and states with high reliance on wind + solar also have higher
electricity prices.
Then two House bills sprang up out of nowhere. HBs 8013
and 8015 entitled “An Act Granting Solar Para sa Bayan Corporation a Franchise
to Construct, Install, Establish, Operate and Maintain Distributable Power
Technologies and Minigrid Systems throughout the Philippines to Improve Access
to Sustainable Energy” were filed only last month, Aug. 6, and were quickly
approved by the House committee on legislative franchise on Aug. 29. The
committee report was approved last Sept. 3 and will go to plenary this week or
next week.
This is a very anti-EPIRA bill and, hence, an attempt to
legalize many illegal provisions. While all players in the generation,
distribution and supply sectors comply with specific requirements of the EPIRA
law, this newbie, no track record corporation wants to do anything they want —
can connect anywhere, can build their own grid anywhere, can carve out to DUs
franchise areas, will pay only 3% franchise tax in lieu of all taxes, exemption
to universal charges, COC and local taxes.
In a position paper by the Philippine Rural Electric
Cooperatives, Inc. (PhilRECA), some parts reported in BusinessWorld last Sept.
4, PhilRECA observed that:
“Solar para sa Bayan Corp. said that it could offer
electricity at an equal or much lower cost compared with the ERC approved rates
of ECs… Paluan was cited as an example with P8.00 per kWh. However… the company
is actually charging more at P10.37 to P15.29 per kWh… such misrepresentation…
that corporation could not afford to offer lower rates.”
This newbie corporation whose franchise is all ready for
a congressional plenary is owned by a son of a sitting “environmentalist”
senator.
To have cheaper and more stable electricity, we need more
competition, less government cronyism and favoritism, and less energy taxation.
--------------
BWorld 246, LTFRB command and control, September 08, 2018
BWorld 247, E-smoking, smoked rice and ASEAN integration, September 11, 2018
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