Thursday, 24 February 2011

Philippine electric rates highest? False

Business Mirror

What a time we live in. As I mentioned several weeks ago, this Year of the Rabbit would turn out to be anything but resemble a sweet bunny.

The Middle East is exploding in revolution that may play out to create disastrous results. The global financial crisis is going into the potential of a hyperinflation stage. Governments around the world are raising debt levels to extremes never seen in history, forecasting a significant drop in the standard of living for billions of people. Individual freedom in countless nations is being threatened by governments fearful of being unable to maintain their power.

Perhaps, the events causing the chaos that we see around might be connected.

We have heard so much in the last weeks of how the ability of people to connect through the Internet, whether
on social sites such as Facebook, or with the general access to information. And yet as the ease of access to information available to the average citizen of the world grows, there is a comparable distrust that governments are telling the truth.

Then the question might be asked, are governments “lying” more often, or is it just that people are more aware of the facts today? Or are people just more skeptical of governments?

This Age of Information has given us all the ability to check and recheck almost everything we hear as “truth.” However, maybe the opposite has happened. Maybe because we have so much access to information and we know that everyone else has this access also, we have come to assume that everything we hear is the truth. We seem to take for granted that whatever an “expert” tells us is correct. Perhaps, because we have all this access to information, we are less critical about what we hear.

We tend to accept so much without any critical analysis on our own part. Perhaps, the best example is the supposed settled science of all the nonsense about climate change. I say nonsense, because there is no scientific consensus. Look it up for yourself. The “facts” are manipulated and the data have been proved to be falsified. How much more that we accept as “truth” the hazards of mineral development, or the impact of legal logging on flooding, for example, may simply not be true?

In one of the major daily newspapers yesterday ran the headline “PHL has world’s highest power rates.” “The Philippines, which ranks among the most corrupt countries, also holds the unenviable record of having the highest residential power rates not only in Asia but in the entire world.”

That headline and statement is unequivocal with no room for any interpretation. But is it true?

To quote further: “The residential rate here [the Philippines] is about 18 US cents per kilowatt-hour. It is 17 cents in Japan, 15 in Singapore, 8 in Thailand, 7 in Malaysia, 5 in Indonesia and 3 in Vietnam, he [a member of Congress] said.”

I looked at my own electric bill. Last month it was P4,166.55 for a consumption of 396 kWh. So that is P10.52 per kWh. At the current peso-dollar exchange rate of P43.685, I am actually paying 24 US cents, not 18 cents. Before government taxes, the rate is 21 US cents. I am now confused.

The Napocor generation charge is 10 US cents and the Meralco distribution charge I pay is 7 US cents, so maybe that is where we get the 18 cents mentioned above.

Although not mentioned, I looked at rates from Hong Kong Electric. HK Electric is charging 18.6 US cents before taxes and other charges, the same as the combined Napocor and Meralco basic charges. That’s interesting.

The 3 cents figure for Vietnam must be old news. The government is raising prices by 15 percent on March 1 and each kilowatt-hour will cost (much cheaper by comparison to PHL), 6.5 US cents.

But then, I look at Singapore through Singapore Power Group. As of January 2011, the per-kilowatt-hour rate to residential users is 24.10 Singapore cents, or 18.89 US cents. That’s impossible! We have been told that the Philippines has “the world’s highest power rates.” Or maybe not.

Also not mentioned in the specific country examples given in the newspaper article, Europe is part of the world the last time I looked. So I went to, which is “Europe’s Energy Portal,” “A commercial organization, strongly rooted within the EU, but run independently from the European Commission.” This organization has current residential electricity prices for all of the European countries.

The per-kilowatt-hour residential rates for several European countries in US cents, including value-added tax: Denmark, 33.79; Germany, 31.31; Austria, 26.58; Italy, 26.71; and England, 18.49. Two of the lowest were Greece (14.56) and Bulgaria (11.86).

With all these numbers being thrown out, you are probably as confused as I am. But I am perfectly clear on one thing. If I lived in Denmark, my electric bill last month would have been not P4,166.55, but P5,845.42. An American example? Rates in Hawaii are 21.53 US cents in Honolulu and New Yorkers pay US 21.27 before taxes.

The facts are clear and simple. The Philippines does not have the highest average residential electricity rates in the world. The newspaper headline and article were false.

How can the government, private business and the people address problems when we do not have accurate information about the problem? Note that all this about the Philippines having the highest rates is a result of a hearing by the House energy committee on the high cost of electricity in the country. And these legislatures are crafting policy on this false information?

Are power rates high in the Philippines in comparison to many countries? Yes. Why? Because we generate most of the power from imported fuel. We do not use enough domestic coal. We do not capitalize on our geothermal resources. We are being talked into the inefficiencies and uselessness of large-scale solar- and wind-power generation. No wonder. False and inaccurate information.

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