Interruptible load program is new DOE’s scheme for poor to subsidize the rich – TUCP

By TUCP
April 15, 2014

QUEZON CITY – Describing the Interruptible Load Program (ILP) as "the poor subsidizing the very rich,’’ the Trade Union Congress of the Philippines (TUCP) expressed strong opposition to the program that the Department of Energy (DOE) will operationalize with MERALCO once the "red alert" level indicating a power supply deficit is reached this summer season.

Under the ILP, large commercial and industrial corporations, including malls, will run their own generator sets to power up their energy needs for their air-conditioning, lighting and operations as a solution to the anticipated power shortage this summer. This will free-up power supply that MERALCO can use to service the captive residential households and small enterprises within the MERALCO franchise area. Those ILP participants running their own generator sets – the most expensive power source – will then pass through their fuel and maintenance costs to the MERALCO consumers.

“Why are MERALCO residential customers going to be made to pay for power they did not use and never consumed in their households? Powering up the malls through their own generators is not a cost incurred by MERALCO that we, the household consumers, actually ended up using. Why will we be made to pay for the air-conditioning of the SM and Robinsons Malls? Anong pakialam natin kung patakbuhin nila o hindi ang mga aircon nila? Kailan naging utang-na-loob natin sa SM o Robinsons na kailangan tayo bilang mga customer ng MERALCO ang singilin para sa air-conditioning nila?” Gerard Seno, executive vice president of Associated Labor Unions-TUCP.

He said that this is tantamount to a direct subsidy from the mostly poor and middle-class customers of MERALCO to the participating industries like SM Malls and Robinson Malls owned respectively by the Sy and Gokongwei families.

“This appears to be a wily scheme that will benefit most the big shopping mall owners like Henry Sy, Jr. of SM Group and John Gokongwei, Jr. of Robinsons Group who both hold controlling shares in the power industry,” said Mendoza. “We believe that in times of crisis, ALL must sacrifice and ALL must bear the burden. This means including the big businesses, the commercial and industrial sector, not just the poor hapless residential consumers,” added Seno.

Henry Sy, Jr. is also the owner of One Taipan Holdings which owns 30% of the National Grid Corporation of the Philippines (NGCP) that has monopoly in the transmission sector in the power industry in the Philippines. John Gokongwei, Jr. on the other hand now owns 27.1% shares in MERALCO which were previously held by the Ramon Ang-led San Miguel.

TUCP slammed the scheme, questioning its legality as it has not even gone through the due process of a public hearing at the Energy Regulatory Commission (ERC). “It is as if Meralco and DOE have not learned some lessons from the automatic rate increase last December, it is as if walang natutunan and here they go again implementing a scheme without consulting the public who again be made to shell out hard-earned money for power they are not even directly consuming. ERC created rules on ILP for Visayas and Mindanao. There are no rules for Luzon and yet Meralco is rushing this, he added.

"We remind both Government and these oligarchs that capitalism without risk is not part of the social contract. Consumers are not supposed to assume all risks and expenses of the business owners. Consumers never agreed to be their insurers against all risks,” said TUCP Executive Director Luis Corral.

“Malls run airconditioning through their own generators at their own cost during brownouts because that is the commercial come-on for them to bring hordes of customers in from whom they will earn profits hands over fist. In the past, they ran their generator sets – without being subsidized by Meralco consumers. But now that these mall operators are also in the power business they want to earn both ways – in fact, in all ways possible – with all costs passed through to the captive MERALCO residential customers.

DOE is now giving these businesses a very special “license to kill.” Pinapaalala namin na si Juan dela Cruz ay hindi charitable institution para sagutin ang lahat ng gastusin ng MERALCO at ng power industry. Ano sila sinusuwerte?” Corral explained.

Corral warned that the dominant position of the Sy, Gokongwei and Manny Pangilinan groups in the power industry and their equally dominant role in the telecoms, real estate, retail and hospital sectors make ILP rife with conflict-of-interest.

"What is DOE thinking? Even the Pangilinan-led TV 5 and Smart Communications will qualify as ILP participants. Consumers will be bled dry on all fronts by a price-gouging MERALCO and by all these ILP participants pretending to do us a good deed. They are not doing MERALCO consumers any favors because they are just really trying to double or triple their profits at our expense" he added.

“Why will MERALCO residential customers have to pay for the electricity that SM and Robinsons will use for their airconditioning and lighting? When did subsidizing the already hefty profit margins of SM and Robinsons malls become a social good?” maintained Corral.

Corral also expressed apprehension as to why the DOE has even deigned to look at the ILP as a solution to the power shortage problem, instead of setting up strategies and policies to ensure the stable and long-term supply of electricity in the country. "When MERALCO management spectacularly failed to ensure alternative supply for the prescheduled Malampaya shutdown last December, its automatic solution was to charge to the consumers the expensive power it got from the Wholesale Electricity Spot Market (WESM). Now, MERALCO will again make our hapless consumers serve as the insurers and fall guy to cover and answer for all their policy failings and management errors in their highly profitable power racket."