Power bills won’t double after all

Had regulators granted the entire P1.85 per kilowatt-hour rate hike that the National Power Corp. asked for, investors would be clapping. But average consumers will be up in arms. By giving only half, did they please both? It would seem so.

Mercifully the 98¢/kWh increase would not hurt residential users too much, except in Luzon. With most of Napocor’s generating plants located there, the actual rise in Luzon is P1.23/kWh (48 percent). In the Visayas, it’s a minimal 22¢/kWh (7.8 percent); in Mindanao, 27¢/kWh (15 percent).

In real terms, this would mean an additional P246 in electricity bills for users in Luzon of 200 kWh per month. Those in Visayas will pay P44 more; in Mindanao, P54. Effectivity of the increase is Sept. 26. But actual collection will start in January, according to Energy Regulatory Commission chief Rodolfo Albano, since power distributors will still have to file petitions to reflect their higher acquisition costs from Napocor.

The real rates were computed on the assumption that distributors get their electricity solely from Napocor. In a third of Luzon where users are in the Meralco franchise, the real increase would be P123 for those burning 200 kWh per month. That’s because Meralco gets only half of its supply from Napocor. But that’s small consolation since Meralco gets the other half, at nearly triple Napocor’s rates, from private producers owned by the firm’s controlling family. Meralco users will in fact start paying 17.4¢/kWh more starting this month, from the petition that ERC granted in July.

"Lifeline subsidies" will still be enjoyed by low users, mostly from the urban and rural poor. These are: 50-percent discount for those using only 50 kWh per month; 35 percent for 51-70 kWh, and 20 percent for 71-100 kWh. Low users are a third of Meralco’s customers, and a fourth of those in other franchises.

Commercial and industrial users will pay more than the rest under a graduated scale based on heavy use. But they’re used to it.

Businessmen have long been crying that RP electricity rates are the second highest in Asia. It pushes up production costs and drives clients to competitors in China, where power and labor rates are lower. That’s no fault though of Napocor, which charged an average of P2.44/kWh before the increase. Most private producers charge two-and-a-half times more.

President Gloria Arroyo had frozen Napocor rates in May 2002 due to a public clamor against rising electricity bills. Napocor has since been losing P90 billion a year, on top of old debts of P900 billion. Businessmen, while already hurting, had wanted the ERC to grant the state firm the entire P1.85/kWh petition, if only to let it operate at real competitive conditions. With true market rates, Napocor would attract private buyers of its plants by the end of 2005. Being more far-sighted than the average consumer, the businessmen foresee the new buyers to upgrade the generation plants and avert a power shortage in 2006 that could kill their industries.

But they’re happy for the meantime with the half-price increase. It’s biting the bullet, but only a bit. Napocor will have to strive harder to keep its losses down and work on a parallel petition with the ERC to charge higher during peak hours of electricity use. The Department of Energy, with ERC assent, would have to impose lower allowances for systems losses from dilapidated equipment and power lines, and new methods to determine profit margins of private producers and distributors based on efficiencies. Authorities would have to redouble efforts to catch thieves of electricity, whether cheating factories or slum dwellers, and of power lines, mostly makers of steel products.

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I erred when I wrote (Gotcha, 27 Aug. 2004) that RP exports only 200,000 tons of coconut fiber a year when the world demand is 1.2 million tons. The demand is indeed 1.2 million tons, but RP exported only all of 200 tons from 1998-2002, or 40 tons a year. This correction from coconut expert Edmundo Lim shows all the more that RP, although literally propped up by coconuts, is missing the boat. Coconut coir is in high use as floor mats, mattress and furniture filling, and geotextile. It fetches $250 (P13,800) per ton, the same price as imported rice, yet farmers just throw it away when making copra. China, among the biggest buyers, uses coir to stop deserts from eating up farmlands.

Lim confirms that one out of every four of the country’s 324 million coconut trees are senile, thus no longer bearing fruit. But he quickly adds that new, inexpensive fertilizers, which he jokingly calls coconut Viagra, can rejuvenate most of the aged trees. The rest must be replaced with new fast-growing, high-yield varieties.

Lim is urging the government to put up coconut and copra buying stations right at the farms, to save farmers the cost of transporting these to mills in the city. By teaching farmers to dehusk coconut for the fiber and to fertilize and replant, they may no longer need to cook nuts into copra but leave this to large-scale makers. Same with the extraction of virgin coconut oil by experts, for use in medicine and cosmetics, or transforming husks into charcoal.

The buying stations would concentrate on raw coconut, husks and fiber. This, Lim says, would give farmers more time to intercrop and raise livestock. He computes the reengineering to raise coconut farmers’ income to P80,000 per hectare per year, from the present P10,000. More than that, it would raise food production and export of coconut products.

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Catch Linawin Natin, Mondays at 11 p.m., on IBC-13.

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