Purchasing Power

EDITORIAL 2002-03 VOL 13 NO 1

EDITOR’S NOTE: Published under Atom Araullo, Scientia’s most prominent editor yet, Purchasing Power slammed the controversial Purchased Power Adjustments (PPA) of MERALCO that imposed additional fees (unrelated to actual power utilized) on consumers. To this day, MERALCO continues to hike its rates and power charges in the country remain high. Just last year, data from the Department of Energy showed that commercial and household electricity rates in the country was the highest in Southeast Asia. Announcing its expected rate hike for July 2018, MERALCO advised its consumers to be energy efficient. However, energy inefficiency is not the true source of high rate but the privatization of the power industry through the Electric Power Industry Reform Act (EPIRA) enacted under Gloria Arroyo’s term and the monopolization of public utilities by profit-oriented companies.

INSTINCTIVELY, THE ELECTRICITY we pay for should amount to the electricity we actually consume, and as a consequence of making a business out of the production and distribution of electricity, a certain something called “profit” is ultimately added to the bill. What remains then is settling how large this profit should be, which is wholly a question of how much a company can get away with.

The privatization of public utilities makes it possible for the disastrous deregulation of prices, and one has to look no further than the local oil cartel to find a strong case. Spurred by virtual cost fluctuations in the world market, Petron, Caltex, and Shell are able to jack up prices at whim. The stranglehold of “the Big Three” is in fact so tight that it takes no less than the President of the Philippines to plead for cost adjustments.

The concept of treating electricity, a very basic and vital commodity, as if it were a piece of fashion in a clothing boutique may be a bit disconcerting, but even by the twisted standards of capitalist profit, the current pricing scheme of Meralco is downright ridiculous. The infamous Purchased Power Adjustment or PPA is, in essence, Meralco’s burden of expense that it passes down to its consumers. instance, part of the PPA is the cost of purchasing electricity from Independent Power Producers like First Gas Company, which is by no small coincidence, owned by the Lopez family. In the past year, not a single kilowatt-hour was consumed from First Gas, yet everybody paid for it in the form of PPA. Even the electric expenditure of Meralco’s own offices and buildings are charged to the public, electricity used to power computers, coffee machines, complicated hi-fi stereo components, and other things that are perhaps too vulgar for us too imagine. The worst part is, because it is all conveniently bundled up in the form of PPA, the whole charging scheme takes on a very arbitrary nature. Who knows what else we pay for in our monthly electricity bills? The Lopezes after all, have a huge business empire.

President Gloria Macapagal Arroyo, quick to strut her tough image and liberalist economics, immediately dismissed initial rounds of protest as another conniving scheme of the Left, who she believes are hell bent to “destabilize” her administration. “Destabilization”, it seems, is a very trendy thing to do. She herself was catapulted into office by the broad masses of Filipinos during the second EDSA revolution.

But in the end, as support for the anti-PPA campaign gradually intensified, Arroyo quite simply ate her words. The last state of the nation address saw the president basking in the glory of reduced PPA rates. The cost of electricity is now in fact a top priority of her administration. Remember, this is the same person who only a few months before stressed the non-intervention of government with private businesses, the same president who is resting the fate of the nation under the dictates of an infallible “free market”.

It is a clever chance to find the issue of power in the middle of a president’s pursuit of the same and the reiteration of its presence in collective action. Beyond electricity, the role of power in politics is only too real to be ignored. Power is a concept that always deserve much attention and criticism, lest things get out of hand. ●