Tuesday, May 27, 2008

Company Inefficiencies Being Charged To Customers

System’s loss, the distribution utilities like Meralco is charging the consumers, is the much-hated issue of the day. The consumers are so furious when they came to know and understand what system’s losses are. Granting that the loss is contributed by the dissipation of electrical energy through the transmission line due to heating, it is irrational to make the consumers responsible to recover such losses. And compounding such inefficiencies are the losses through pilferages of electricity and thief of transmission line materials and accessories. All these are being charged to the consumers which they do not understand why. What is the reason behind this irregularity?


Where does the proponent of this system get the wisdom, reason, and justifications to have the recovery of these items be shouldered by the customers? It is quite unthinkable how this oppressive scheme was legalized. Why should the cost of inefficiency of a company be charged to unsuspecting clients? The losses are not the fault of the consumers. It is irrational that consumers should suffer the penalties for the wrong-doings of another. It is the responsibility of the company to secure its products and make the necessary steps that punishment is served to the erring party. People go to utility company offices with so many questions but they got few answers. Sometimes they are avoided or rebuffed when the topic of complaint is on this issue. Company personnel always made reference of the law that provides them the right to bill their clients of the system losses.


Republic Act No. 1732, otherwise known as the anti-pilferage law, was intended to give punishment to the pilferer and to identify the penalty due the erring individual or party. The consent to charge the consumers of the system’s loss was a rider provision and not the immediate intent of the law. They connived with one another –the distribution utilities, the Energy Regulatory Board, and Congress- and attached this system’s loss provision so they have sure source of funding unknown to the consumers. Why would the consumers allow it to happen if they are aware of the consequences which are detrimental on their part?


Under the new Electric Power Industry Reform Act of 2001 (EPIRA Law) the same rider provision of system’s loss was inserted in Section 43, Item (f), “Functions of ERC” and where the Transmission Line Department of the National Power Corporation, a government-owned entity, was being privatized to form a Transmission Line Company (TRANSCO). It was again hidden in these lengthy paragraphs which involve the privatization of TRANSCO and with a mollifying clause that ERC should find ways to “ensure the complete removal of cross subsidies, the cap on the recoverable rate of system losses ...” and relieve the burden on the consumers.


If the purpose of the law is to appease the consumers, EPIRA law should be amended. System’s loss provision should be removed from the liabilities of the consumers. It should be clearly identified, prominently displayed, and included in the summary of content of the amended law. Loopholes should be plugged and catchy provisions be discarded to avoid contentious issue.

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