Synchronized

It was either pure coincidence or political design.

Last Tuesday, April Fool’s Day, Sen. TG Guingona hurriedly called for a press conference. The purpose, it turned out, was to unveil the report of the Senate Blue Ribbon Committee regarding the so-called “pork barrel scam.” The hearings rather suspiciously  narrowed its focus to only the allegations made by Benhur Luy — even as pillage of the pork barrel, we all know, is an epidemic.

It might have been more worthwhile for the Blue Ribbon Committee to have more boldly examined the political economy of pork and its deleterious effects on our democracy. That is now academic.

Quite oddly, Guingona released the report even before it was signed by the committee members. He seemed to be in a rush.

We saw why an hour later. The Ombudsman called its own press conference, announcing plunder charges will be filed against three senators and several others linked to the funneling of pork barrel funds through the Napoles NGOs.

Guingona was apparently racing to beat the Ombudsman’s announcement. It would have made the Blue Ribbon Committee report a complete non-event, making all those hearings seem a waste of time.

It still is. After grabbing the headlines for an hour, the Guingona report was completely overshadowed by the Ombudsman’s move.  Despite some effort to make pathetic policy recommendations (such as requiring NGOs to operate for three years before being allowed to handle public funds), the report was really about filing charges against the three senators linked to Napoles.

By racing against the Ombudsman’s announcement, Guingona succeeded only in creating the impression that the whole thing is politically orchestrated. Or that the synchronized press conferences are really April Fool’s jokes.

Perhaps now Guingona can move beyond playing the redundant role of fraud investigators and examine the weightier questions concerning the nexus of politically-dispensed public funds, patronage politics and institutionalized corruption (including the bribery of entire institutions). Any conclusions derived from that might have more strategic implications on the evolution of our democracy.

Delayed

Two weeks ago, the Energy Regulatory Commission (ERC) finally exercised its mandate to protect consumers by ruling that a recalculation of the generation rates for the November-December period be done. The recalculation will be guided by the pricing pattern of the preceding 12 months.

That bold ruling will drastically bring down the speculative prices charged for that period when the Malampaya-dependent gas generators were sidelined. It will cut generation charges drastically and render academic the petitions now pending at the Supreme Court.

The ERC ruling will benefit all consumers. It will have the effect of cancelling the November-December price spike and forcing recalculation of electricity bills over the next few months. It will bring palpable relief to consumers by moderating whatever price movements might be forthcoming in the price of power.

Meralco welcomed the ERC’s decision to take administrative control of the pricing of power traded in the wholesale electricity market. In fact, the idea of doing this emergency measure originated from Meralco itself.

As a distribution utility, Meralco simply reflects generation charges in its final billing, passing on the added charges of power generators to consumers. The distribution utilities make no additional profit from increased generation charges and will incur no losses if generation charges are brought down administratively.

Although they make no additional profit from spikes in generation charges, the distribution utilities bear the brunt of public wrath simply because they play the role of collecting agents for the power producers. Meralco, for instance, has been the target of misinformed protest actions by militants seeing to win public favor.

It is a different story on the part of power producers. Some of the producers made billions in windfall profits from the speculative pricing that hit the wholesale electricity market late last year. They will not be able to collect those windfall profits because of the ERC ruling — or return the windfall if they have collected them.

The pain, to be sure, will be unevenly distributed. There are merchant plants that generate and sell power only a few weeks in the year, when prices are appropriately high for them to make money. Some of them will stand to lose quite a lot of money if the ERC ruling is implemented.

According to one expert, the power producers that stand to lose the most from the ERC ruling are government-run plants. The losses they will incur will translate into hidden subsidies. For privately-owned generators, any loss will be absorbed entirely by their owners.

It is probably understandable that the losing power plants, especially those pushed to the brink of bankruptcy, will contest the ERC decision. The word in the market is that they are preparing to do battle on this matter of recalculating generation charges already defined by the wholesale market last December. 

If they do contest the ERC recalculation ruling, either by moving for a reconsideration or going to the courts, the possible benefits consumers might be expecting will be delayed indefinitely. With the peso’s deterioration, the higher costs for fuel and expected shortage during the dry months, there will be nothing to mitigate increases in electricity charges.

Our power market is such a complex universe. The costs and benefits are unevenly distributed. No ruling can be completely fair to everybody.

Right now, however, appeasing the consumers seems to be the first order of business. Blame regulatory incompetence, bureaucratic inertia or greed on the part of profiteers: the point is that the sharp spike in prices towards the end of last year was simply unacceptable – and economically intolerable.