Consumers Domain
PPC's greed & more wishes
"All what you hear, all what you read
It's all designed on fear and greed..."
- from "Don't Let the System Win" by John Gavin Gillard
It seems that our new year will indeed be dark and gloomy. Panay Power Corp (PPC), which is owned and operated by Mirant is now using the same blackout bogey to scare the public and apparently try to influence the outcome of the ERC hearing on January 19 that will be held in Cebu City. PPC has a joint petition with PECO to amend their contract and raise generation rates. Of course PECO is a willing accomplice in this ploy.
What is the purpose now of PPC's new threat? In 1997, they entered into a contract with PECO, which they freely sign, and committed to charge a rate not higher than NPC rate. Then after years of violating their commitment, the regulatory body ordered them to reduce their rates and stick to their contact. Now they are applying for the amendment of that contract as they discovered that their contract is not "profitable". While their application is still being heard they would like to put the brunt of their business blunders to us consumers.
Remember that early last December, PPC sounded the same propaganda and they, together with PECO, were able to squeeze a provisional increase from the Energy Regulatory Commission (ERC) after the first hearing on December 6.
I can't believe the shortage of conscience and the absence of social responsibility on the part of PPC and Mirant. Now, they are saying that by January 19, they have to pay their obligations amounting to P600 Million to Shell, if not, they will stop their operations when their reserve fuel runs out which they claim is only until January 23. I mean for several years Mirant-PPC enjoyed handsome profits despite its inefficiency and high rates as we consumers are forced to pay since the time it became the sole supplier of PECO. Now that it has this standing obligation to Shell, PPC will simply declare that they can't do anything but to stop its operation.
Simply put, for several years they have amassed profits and now that they have an obligation that they have to pay (the cause of which is still questionable) they would rather stop operation than dig into their own resources. While their application is still being heard, PPC should at least have the conscience to continue its service, as power generation is imbued with public interest. It's not as if they are selling ice cream or halo-halo.
The 2001 Annual Report of First Philippine Holdings Corp (FPHC), the previous owner of PPC, reveals that in 2001, PPC earned P767.4 million in revenues. In the next year, FPHC's 2002 Annual Report discloses that PPC earned P749.23 million. Data from FPHC also shows that PPC earned P369 million in the first half of 2003, prior to divesting the company to Mirant. Thus, it is safe to say that PPC's revenue will be at a value of at least P750 million yearly.
As a gross revenue, the P750 million of PPC already cover its fuel expense, salaries to its executives and employees, other inputs and operational expenses and its net profit. Now how come that in simply two billing cycles (October and November 2005) that the previous P2 rate reduction was implemented, it has already accumulated P600 million in debt to its fuel supplier. It means that for just 2 months in 2005 its fuel expenses are already 80% of all its total revenues in 2001 to 2003! Can you believe that?
Now, granting that the amount is accurate, we can conclude that the obligation was due to other reasons and not simply caused by the rate reduction, which was only implemented in two months. Remember the December billing is already covered by the provisional increase granted for PECO to collect a higher generation rate so in turn it can pay PPC with adjusted rate. Well, in fact even if we count 3 or even 4 billing periods, the value is still not plausible.
This goes to show that PPC under Mirant is an inefficient company for incurring a debt in 2005 that is equivalent to 80% of its 2001 to 2003 annual revenues.
Now to the people of Iloilo, will we permit this kind of corporation to open up a dirty coal plant here in the province? We now know how inefficient and irresponsible Mirant and PPC are. Can we trust them to provide us with affordable and reliable power here in Panay? In fact looking at it in a bigger picture, can we see now the reason to oppose the privatization of power services and other utilities such as water?
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Now here are more wishes for the New Year sent to me by this paper's readers:
- "I wish for d end of dirty politics and unity of d Filipinos for d progress of our country. " (Text message from Ronald Diaz of Iloilo City)
- "I wish that Mayor wil act 2 protect the electric consumers. D way I see it, as reported n d news, Trenas is mor concernd 2 PECO & PPC ." (Text message from DT Abcede of Arevalo, Iloilo City)
- "Hop d growth n d economy said by govt wil b felt by d poor and hungry filipinos. Puro lang growth wala man tupa sa imol!" (Text message from Boy G. of Dingle, Iloilo)
- "Wishing 4 better services at our CT hall & also n ol national & local public offices." (Text message from Annie of La Paz, Iloilo City)
Now let me add my own wishes:
- I wish that those advocating for charter change will bang their heads and bring themselves back to senses and realize that the main problem facing us now is not the form of government but the those who run it and the trapo system they represent.
- I wish that Raul Gonzalez Sr. would finally discover the true essence of his being the Secretary of JUSTICE (emphasis intended). That he should act (and talk) with justice in mind and not simply lick his boss' ass.
- I wish more Faeldons in the military will bravely come out and declare their loyalty to the Filipino nation and not to their fake commander-in-chief.
- I wish that the American suspects in the Subic rape case would be turned over to the Philippines, for the speedy trial of the case and for justice to the rape victim.
(Send your comments and reactions to: for text messages to 0919-348-6337; for e-mails to ianseruelo@yahoo.com; and for blogs to http://consumersdomain.blogspot.com.)