The Return of Systems Loss
December 2nd, 2009 by Dean De La Paz
The last we heard of systems loss was during the Manila Electric Company (Meralco) board controversy when a multiple-arena attack was waged against the utility, curiously, from a state pension fund and a gaggle of politicians. In the midst of controversy, in a patch reserved for professional and learned regulators, a political appointment took place.
The Energy Regulatory Commission (ERC) chairman invoking retirement cut short his six-year term and an acting chairman was appointed. Among the choices were the co-chairman of the Joint Congressional Power Commission (JCPC), another, a principal of the law firm that represented Arroyo in her election suits. One, well-qualified. Another, well-connected.
Among the issues hurled against Meralco was the question of systems losses. Here the ERC is the adjudicator. Where the debate is technical, quantitative and complex, wars are waged beneath the radar of public scrutiny where political tentacles are effective. In this, it is appropriate analogy that slimy tentacles have suction cups, and in the case of the monstrous Architeuthis, serrated teeth and claws. Let us add that squid appendages can extend to the narrowest nooks, crannies and crevices.
The front-runners were tanked. Traditional qualifications were not enough. Connections, likewise. Other variables and credentials were ostensibly prioritized. Gloria Arroyo appointed a town mate, a second district solon succeeded by Arroyo’s son in Lubao, Pampanga, and a supporter of impeachment charges against former Chief Justice Hilario Davide. The appointee was the Palace deputy chief legal counsel. According to Arroyo’s son, the appointment was the result of party lobbying (PDI, July 11, 2008).
We never learn. In a regulatory landscape peppered by appointees entrusted technical responsibilities, recent energy crises are testimonies to the curse of appointment by patronage.
The resurrected question of systems loss is a case in point. Barely two months into the appointment the ERC mulled “the removal of the system loss charge” through “regional consultations”.
The subject of systems loss is not so complex as to merit reckless statements on total elimination. In global electricity pricing, such ensures economic viabilities and prevents more expensive system-wide outages.
Systems loss impacts on pricing from generation, to transmission, through distribution. Generation costs and losses pass unregulated and are ultimately borne by distributors. Caps are imposed at the transmission and distribution relays. In 2008, the allowable systems loss passed to consumers was 9.5% for DUs and 14% for cooperatives.
Systems loss caps vary among economies. Sans pilferage, systems loss on even the most efficient can range from 5% to 8%. Article I, Section 2 of the ERC Guidelines for the Application and Approval of Caps on the Recoverable Rate of Distribution System Losses identifies other factors as load density, SALES MIX, cost of service, delivery voltage and others.” The systems loss rate is that “determined…for DUs where different system loss charges were granted for each of their RESPECTIVE CUSTOMER CLASSES.” (caps supplied).
As essential cap determinants, these cannot be disregarded. Diverse markets require voltage controls, more transformers and cooling systems that increase systems losses. These extend beyond the simplistic segregation among technical, non-technical and administrative losses under Article 3.4 of the Philippine Distribution Code. In fact actual data validates market diversity’s importance in determining parameters.
Homogenous rural communities like Misamis Oriental, Bohol, Siargao, and Tablas Island registered from 6% to 6.9% systems loss. Storm-frequented Batanes, registered 9.30%. War-torn Lanao, 9.83%. Diversified economies with industrial and residential mixes such as Tarlac, Davao del Sur, Cebu and Metro Manila have actual losses ranging from 8.46% 9.83%. Meralco’s actual is 9.28%.
Efficient economies like the European Union average 7.0 %, while the United States has 7.5%. Canada had 9.2%. Bangladesh’s ranges from 20% to 35%, Pakistan, from 24.13% to 27.55%.
Curiously, under its resolution 17, the ERC now imposes on urban franchises the same limit as the actual loss of a homogenous rural economy like Camote Island, where, at 8.20% to 8.50%, there is absolutely no market diversity.
Apparently, violating its protocols, the ERC knowingly disregards market diversity despite having distribution databases ERC-DSL-02 and ERC-DSL-04 which specify customer mix and consumption data.
Recently the ERC wrote, “It is true that the sharing of electricity consumption between the industrial consumers that are connected to high voltage and residential consumers that are connected to low voltage has an effect on the total system loss,”. unfortunately, the ERC blindly imposed systems loss caps “regardless of whether the franchise area is highly urbanized (or not).”
We never learn. As in recent oil sector shortages, extraneous variables are ostensibly being prioritized.
December 2, 2009 at 10:18 am
This ’systems loss’ as explained by ERC during earlier budget hearings at the House of Representatives ought to be something brazenly immoral since it passes on to consumers the burden of vicious corporate inefficiency.
It was then pegged at a whooping 15% altogether. Now imagine that in every Meralco bill you pay monthly, you are charged that so much amount in ’systems loss’ – whether or not there had been real-terms losses over that period of time.
In the more ideal setting, Meralco ought to do away with systems loss.
December 2, 2009 at 11:05 am
System Loss takes place during electric transmission. Because of
the resistance on the electric wires. It is also the cause of which
MERALCO can charge more on its customers. There is no Regulatory
Commission that monitors this System Loss in every Specified Area.
So, it is just the arbitrary decision of MERALCO to put a figure on your Electric Bill. Ever heard of a Highway Robbery by Corporations?
Use an Electric Wire Jumper. If they found out. MERALCO will procecute and fine you. They put an unseen Jumper inside your pocket to pickpocket your money thru System Loss. It is Legal!
December 2, 2009 at 11:41 am
What you have just raised is even more brazenly immoral.
Why will the government work for Meralco as its prosecutory arm?
It is the height of official stupidity to favor Meralco with favorable laws that are uncharacteristically pieces of class legislation. Why should government be subservient to corporate private interests?
December 2, 2009 at 3:46 pm
I believe people stealing electricity is one big factor in system loss. Those who pay systems loss are actually paying for the electricity stolen. The illegal taps that the squatters and others do are a big part and cause the burden for fellow Filipinos. While government and corporations are not excluded, the people themselves who steal electricity play a big role in making our Meralco bill expensive.
December 2, 2009 at 8:40 pm
Dear Chino F.
In countries where the systems loss cap is smaller than ours, the difference is subsidized by the government. In exchange however, the government actually goes all out to protect the lines and aggressively runs after the thieves. In the Philippines, the efforts to stop the thievery is mostly the distributor’s burden.
For all his siga and bravado, have you heard Angie declare that he will go after line thieves. As a military man, he is expected to do that, even as we don’t really expect him to understand why.
Dean
December 3, 2009 at 1:10 am
Why cant those inspectors see those Electric Jumper Wires? They are easy to spot. They dont hide. When you inspect these wires without notice. Dont play the BLAME GAME. If Corporations are legally stealing money from consumers. Who would stop them?
December 2, 2009 at 3:57 pm
Dean,
Sorry for writing at an angle to what you have said so potently. I pontificate, as per usual.
Appointing friends and family or doling out jobs as a reward for favors is a sure path to incompetence. If the Philippines wants to make a high-return investment in INFRASTRUCTURE, it should do it regarding employment PROCESSES, and implement a fair employment law that requires hiring, appointing, and promoting people solely on the basis of education, experience, or proven ability to produce. Workers ought to be outraged – as outraged as were blacks or women in the US – that opportunities to succeed are being cut off by favoritism. It’s as disgusting as racism and patriotically abhorrent because it is Filipinos discriminating against TALENTED Filipinos.
Workers need to demand career opportunities that are honest and not blocked by favoritism.
When people have careers at stake, corruption is not done lightly. So when someone asks, what, practically can be done to stop corruption, shout “pass a fair employment law” that gives people something more valuable than quick cash: a career, an opportunity to grow and succeed, honestly.
Joe
December 2, 2009 at 8:30 pm
Dear Joe,
Amen.
Regards,
Dean
December 2, 2009 at 7:22 pm
I have a more fundamental question. I guess Mr. de la Paz is one of the very few learned individuals who can understand and articulate the problems of the power industry. As a consumer, however, I know I am being cheated but I cannot prove it. I cannot prove it because the regulatory process has made the public consultation process so complicated and technical so that ordinary mortals like me cannot comprehend what’s going on. Then MERALCO can go on stealing.
For example, there was Public Consultation held last Monday, Nov.16, 2009 posted at the ERC website which I read this morning. Part of the first page stated:
“Pursuant to Section 43(f) of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001, and Rule 15, Section 5(a) of the Implementing Rules and Regulations issued pursuant to that Act, the Energy Regulatory Commission (ERC) promulgated the Guidelines on the Methodology for Setting Distribution Wheeling Rates (ERC Resolution No. 12-02, Series of 2004, dated December 20, 2004). The DWRG has subsequently been revised and re-issued as the Rules for Setting Distribution Wheeling Rates for Privately-Owned Distribution Utilities Entering Performance Based Regulation [Second and Later Entry Points] [ERC Resolution No. 54, Series of 2006, dated December 13, 2006, hereafter referred to as the ‘RDWR’], with a further subsequent revision on December 8, 2008 for the Third Entry Point andJune 22, 2009 for the Fourth Entry Point. In terms of Section 1.9 of the RDWR, these rules may from time to time be changed by the ERC.
Since the next Regulatory Reset is for the First Entry Group on entering the Third Regulatory Period, the ERC has determined that further changes are now required to the RDWR to reflect the next Regulatory Period. The proposed changes are reflected in the attached draft version of the RDWR, titled Rules for Setting Distribution Wheeling Rates for Privately-Owned Distribution Utilities Operating under Performance Based Regulation (First Entry Group : Third Regulatory Period), dated October 6, 2009 and are also described in this Discussion Paper. Submissions from interested parties are sought on the proposed changes of the RDWR, as described in the Discussion Paper. Interested parties are also invited to suggest further changes to the RDWR, for consideration by the ERC. Details of the required format and time of submissions are provided in Section 1.4 of the paper.”
The last paragraph on page 6 also stated:
“Although this consultation is open to public viewing, only parties of record who have filed written comments will be allowed to participate in the discussions. Should there be time before the end of the public consultation; the Commission shall allow verbal comments from other persons who have an interest in the proceedings. Parties of record are not required to have a lawyer present but are strongly encouraged to have technical experts present with knowledge of accounting, finance, engineering, energy-economics or pricing issues.”
Clearly, a reading of the above posting readily reveals that the subject is highly technical and that interested parties who may desire to comment on the draft revision and participate in the consultation should have the technical background as strongly advised by the Commission. Page 5 of the posting says: “Parties of record are not required to have a lawyer present but are strongly encouraged to have technical experts present with knowledge of accounting, finance, engineering, energy-economics or pricing issues “
Like systems losses, the subject is highly technical that only competent people on the subject enumerated by the Commission can submit comments and intelligently participate in the consultation. Apparently also, only power utilities who have the manpower and financial resources can possibly participate in this consultation.
This brings us to the question: How can ordinary consumers like us participate in the discussion of a highly technical subject, which is used as the basis of the Performance Based Regulation (PBR) Method for Rates Setting, and which has become the entry point of the application of private distribution utilities for rate increases?
The recent ERC decision approving MERALCO application for rate increase under ERC Case No. 2008-004RC has been met with serious opposition, which we can only attribute to ERC’s failure to comply with its mandate under Section 41 of the EPIRA. Indeed, under this new methodology consumers can only expect the persistent trend of rate increases which we find as patently contrary to the professed objective of the EPIRA to ensure a reasonable price of electricity.
Does this guarantee that the hapless consumers will never be able to stand up for their rights? This is like the colonials taking over the land of the lumads simply because they did not know anything about the Torrens Titltling System.
Maybe the appropriate response is also start our own struggle against MERALCO.
December 3, 2009 at 6:13 am
Chito C,
“How can ordinary consumers like us participate in the discussion of a highly technical subject . . .”
Good question.
Wracking my brain for a reasonable reply, I come up with . . .
The US has an organization called “Consumers Union” that evaluates consumer products, taking over the job of mediating between technicality and consumer . . . ummm “simplicity”. The starting point on electric utilities might be to take each kilowatt hour and divide it by total costs, and get a simple number. Do that for every provider. Then dig down to find why some are more expensive than others – because of legitimate expense or hidden cost.
They would also do a recap of percentage of “brownout” time, here on the Philippines (mine was out four days in succession last week, for replacement of poles).
Then give it to the press and embarrass the idiots who can’t manage their costs and provision well. Or sue them, if you can find a responsive court.
Joe
December 3, 2009 at 8:25 am
Joe:
I approached our Department of Trade and Industry (DTI) which has a consumer desk. They have an office on Buendia. Unfortunately they told me that they don’t do power. They referred me back to the Department of Energy (DOE). However, DOE, in my view, is conflicted because they have to balance the interests of the investing companies and the consumer interests. The ERC too has a conflicting status: they have to balance the needs of the investors and the consumers.
When I went to DOE and ERC they told me that the “spot market” will ensure a competitive market price for electricity. But, sorry for having a stupid consumer like me, how would that affect my life? I don’t see that “competition” in my bill!
So you’re right Joe. We need a consumer group that will fight for our rights. And as consumers we should chip in so we can educate ourselves. Incidentally, I was told in DTI that there’s supposed to be a “consumer education” fund. I don’t know about you, but I haven’t heard about it and neither have I seen that that in my bill.
If you hear anything close to that consumers’ group, give me a shout…otherwise I’ll just keep saying heeeelllppp!
ChitoC
December 3, 2009 at 9:20 am
Chito,
Nice to hear that you pursued it, actively. Most would just yap.
True, also, that it is a big step from idea to real action, like a Consumer Union would provide. Also missing is a Civil Liberties Union. I understand “they” either shoot the attorneys or bribe them to the “other side” whenever an initiate crops up . . .
Joe
December 4, 2009 at 1:58 am
So these people gave you the run around. They had
picked your pocket already. So, like the Quiapo
pickpocket ring. Pasa-pasanhan na! What country of
thieves we have!
December 4, 2009 at 5:05 am
Dear Chito C.,
The National Association of Electricty Consumers (NASECORE) is a consumer group that constantly engages ERC. Unfortunately, they are not technically armed. But they are aggressive enough to make ERC uncomfortable.
Dean
December 4, 2009 at 5:21 am
We will assist our Filipino Consumers to fight against these Corporate Thieves. Picpocketing are not the monopoly of Pickpockets in Quiapo. The biggest Pickpockets are in the Corporate World. Rest assured, I can help on Technical Matters.
December 4, 2009 at 7:59 am
The problem about complaining on electricity rates is that it can be a blatant open crime and there is nothing we can do about it. For example, my power bill is around P5,000 per month. Because of the systems loss miscalculation by MERALCO, I think there’s a P0.32/kwh overcharge (I’m not an expert so could be wrong). This is around P130+/- per month for me. This is real money for me that I am throwing away. What if I, alone, complain? If MERALCO offers to settle my complaint for P1.0M, human as I am, I might agree and withdraw my complaint. If my complaint is right, however, the impact on MERALCO could be in the billions! But taking on my greed, they only pay P1.0M and they save billions. While I cannot prove this, this approach will be perfectly logical for MERALCO. And it seems this is also within the culture of the owners of MERALCO.
This is where cultural, political, and legal realities intertwine. Can the real Filipino bayanihan spirit prevail where all of us get together, share in the legal expenses, and then have a mass-based movement to counter MERALCO’s attempts to muffle its consumers through bribery of a few?
Going back to my DTI and DOE experience, I think if I had a big group behind me, I could have been treated differently.
Maybe Dean/Joe you can point me towards these groups that you mentioned and let’s see how we can proceed from there.
December 4, 2009 at 8:38 am
Dear Chito,
NASECORE is nationwide. Its the closest that we have as a consumer advocacy group in the electricity sector. The president is Pete Ylagan. His cell nos. is +639178461299. I am sure that he will be happy to troop to ERC with you but you have to bring your own flaming torch and noose.
The gobblydigook you mentioned above is on the Performance Based Rating (PBR) mechanism which is a pricing model recently adopted and applied to Meralco although it’s been in-use for other utilities (Davao, etc.) for at least a year. it replaced the simpler Return on Rate Base (RORB) model long in use and globally accepted.
The guideleines are indeed complex and constitute about eleven volumes in ERC’s files. Frankly, I doubt if the commissioners understand half of it. It’s a pricing model originally designed for the telecommunications industry in the UK and from that alone you can see why there might be some incongruity in applying it to electricity billings blindly.
Please give Pete a call. He is also struggling against the PBR. You can drop my name for as long as you can duck fast enough.
Kidding aside, Pete is an upstanding person with whom I’ve shared differences but never on a personal basis.
Regards,
Dean
December 4, 2009 at 10:15 am
I think, they made the rules. He who have the Electric Power dictates the rules. Same as in Corporate negotiations. He who have the Gold. Makes the rules.
You can have a good formulation. With the help of
any Electrical/Power Engineering School. System Loss charges can be formulated on Philippine variable conditions. British and U.S. have different variants. Formulate it on “as is” basis. Then, negotiate with the Sharks. We hope they will not bite as much.
December 2, 2009 at 9:04 pm
Dear Joe,
I read your reply twice. So here’s another reply.
I was twice nominated to be one of the ERC commissioners. One, because as the ERC was being created I was one of two who conducted seminars on the qualifications needed by a commissioner and the rationale behind such an agency, being then a consultant to EPIRA.
Two, I had come from the energy industry.
When my name was first submitted, I only had two recommnedations which I did not actively seek. One was from Joey Salceda and the other was from a cabinet secretary. Joey and I are one year apart at the Ateneo.
The person who beat me to the position had come from the industry like me and he was an executive assistant at Napocor. He also had all of the Cebu congressmen as sponsors. Cebu was a bailiwick of sorts for Arroyo.
The second time my name was submitted, I was endorsed by the Philippine Chamber of Conmmerce and Industry, the Employer’s Confederation, three of the five sitting commissioners of the ERC, two senators, a cabinet secretary, the Association of Petroleum Dealers, The Philippine Independent Power Producers Association (of which I was vice president, a law partner of former president Diosdado Macapagal, and one of the Arroyo boys.
I thought that with those, I had learned to be a politician (of the trapo kind).
I was wrong.
Rather than create a vacancy by appointing as chairman an existing commissioner when the ERC chairman prematurely resigned, Arroyo appointed a town mate.
I really have a lot to learn about Philippine politics and, frankly, it is not an education that I look forward to.
As you so astutely have perceived, the essay on systems loss is not about systems loss.
Regards,
Dean
December 3, 2009 at 2:21 am
The Filipinos themselves are their greatest enemy. The patronage politics. To put unqualified people because they come from thier political areas. Or putting people to reward them for their political loyalties. Or just plain nepotism. Are just that corrode our public services.
Qualified and competent people who can do the job are bypassed. Or they go abroad to be used by foreign countries. This is the sad situation of our country’s public service.
December 4, 2009 at 5:08 am
Dear Hyden,
If you check her client records, the current ERC chairperson was the lawyer of Lubao, Pampanga’s most famous resident next to Arroyo – Bong Pineda.
How’s that for credentials?
Dean
December 3, 2009 at 6:17 am
Dean,
Prescriptions for high blood pressure are not needed. You can just order up the pills at Mercury.
Joe
December 3, 2009 at 6:05 am
In modern day economic accounting food and energy costs are separated from measuring inflation. All modern Central Banks use core inflation (food costs and energy costs excluded) in measuring consumption.
Hence being a third world economy with no industrial productive capacity the government intervenes massively to subsidize consumption most especially in the food and energy sector. The Philippines strictly speaking does not have its own domestic energy industry. The economy has two sides. Party and counter party. Business perspectives like the deans has only one side. The supply side.
No matter the good intentions of ignorant but learned men like Dean, price setting for goods and services in these two sectors are not market determined entirely. We should be thankful for the smugglers of oil products and the smugglers of transport equipment for keeping prices low thus helping keep our inflation rate down.
We should also be thankful for the smugglers of food for the same reason.
For third world countries there are huge structural and systemic barriers for entry into the energy industry. Remove the role of the state and even the Dean with his high income level would not be able to afford the price of electricity.
If the state were to withdraw its guarantees (implicit in nature) for the foreign obligations necessary to fund the energy infrastructure in this country the price equilibrium process would kick in and force us into a move to industrialize.
We do not build our energy infrastructure from scratch. The supply chain is almost entirely imported with very little value added domestically. We still have not learned to build our own steam engines. The result is we have not stopped paying for the loans for it.
The problem with energy in this country is we have to many politicians and investment bankers suggesting solutions but almost no engineers and capitalists to solve the structural and systemic gap in development.
We have not yet started the debate on where we think we are in the developmental ladder in economic development to be able to offer policy prescriptions.
J.P. Morgan (investment banker) had Edison and Carnegie who set up the business model for the energy industry standing on the shoulders of other inventors and innovators. The Rockefeller’s, Vanderbilt’s, Sloan and Ford did the rest for the transportation/petroleum industry. He (Morgan) organized G.E. and U.S. Steel.
The PRC is now using the state led model to create their own industrial class.
The only other choice we have is allow our sovereignty to be transferred to the tri-polar group of the U.S., Europe and Japan based on our strategic trade relations. Voting power or sovereignty would be decided by the three groups and we should abolish the national government and move to empower the local government under this new neo-colonial setup. The Federal Reserve/ ECB and the Bank of Japan will determine our monetary policy and the G-7 will determine our fiscal policy.
You either push for total sovereignty or give it up. There is no more middle ground for a failing state.
December 3, 2009 at 9:23 am
J_AG,
You think out of the box, for sure. Total sovereignty requires accepting responsibility for things gone bad.
Long way to go.
Joe
December 4, 2009 at 9:28 am
It is no longer thinking out of the box. Just look at the EU and the present problems with Greece.
Greece will have to give up sovereignty to survive as leaving the E.U. is not an option.
The Philippines is already in a de facto common currency agreement with the U.S.
The next step is forgetting about statehood. We simply cannot afford it right now.
http://www.ft.com/cms/s/0/c2508bf6-dfaa-11de-98ca-00144feab49a.html
December 3, 2009 at 11:20 am
total sovereignty or give it up.
I would like to have total sovereignity which we are still fighting for. Obviously colonists would like to point out that we don’t deserve it to serve their own purpose (Afghanistan). Colonists have more propaganda moves to create colonization a pleasing idea rather than let a country run on its own (Afghanistan, Iraq). Iran is a “failed” state because U.S. dominance has been lost.
In its essence “Failed states” are states not adhering to U.S. standards. Thus the U.S. consider China, Iran, North Korea “failed”. They are prosperous but mainstream media make them look poor and destitute.
December 3, 2009 at 1:51 pm
Edward,
I fear you have colony paranoia. The US is certainly colonizing no one. I doubt that you would find anyone of import in the Obama camp who considers China a failed state, or even Iran; North Korea, maybe. China is emerging from its own paranoid days as a responsible world citizen and Iran and North Korea are respected as independent states, albeit states with poor human rights perspectives and actions, and bad attitudes, toward their own people and others.
Mainstream media don’t make China or Iran appear destitute, as they are not. North Korea is portrayed as destitute because they are.
You have a rather dark view of the light, I fear.
Joe
December 3, 2009 at 1:57 pm
ps, You would seem prefer that the US allow the Taliban to harbor terrorists who drive airplanes into America’s biggest skyscrapers. That’s why the US is in Afghanistan, something you apparently object to. But you don’t object to the 9/11 attacks. Interesting . . .
Joe
December 4, 2009 at 3:07 pm
Even the Philippines is colonizing its rural ares and I am not partial into condemning it. Philippine colonialism has produced many warlords and rebels that beset the countryside. I think the same happens at a global scale.
As of the 9/11 I believe the attacks are suspicious. It’s not the first time the U.S. made a false flag alert to justify occupying another country. That’s why many call Afghanistan the new Vietnam. Up to now the referendum into investigating the 9/11 attacks are not given a chance by the U.S. Gov’t.
Failed states can no longer perform basic functions such as education, security, or governance, usually due to fractious violence or extreme poverty. Within this power vacuum, people fall victim to competing factions and crime, and sometimes the United Nations or neighboring states intervene to prevent a humanitarian disaster. However, states fail not only because of internal factors. Foreign governments can also knowingly destabilize a state by fueling ethnic warfare or supporting rebel forces, causing it to collapse.
Shortly before the attack on Iraq, the hatred between Sunis and Shiites became worse and worse. Guess who has the most number of spies in other countries. I smell a rat.
December 4, 2009 at 8:30 pm
Edward,
So who was it, do you figure, who flew the two planes into the WTC? Maybe like the landing on the moon, it was done in Hollywood, eh? The threads don’t go back to Osama Bin Laden at all; they go to Spielberg maybe.
Ummm, I am worried for you here, Edward . . . you have maybe read one too many action movies or read one too many spy novels.
Joe
December 7, 2009 at 7:47 am
Sorry joe,
all fact-based news and documentaries
I believe that there was an inside job. This was supported by undeniable publicly available facts.
http://www.911truth.org/
Academics claim 911 Inside Job
Victim’s Families continue fight for new 9/11 probe
This is remeniscent of the Gulf of Tonkin Incident when Lyndon Johnson “created” a story to have congress pass the Gulf of Tonkin Resolution to justify US Military in getting involved in a war. This time its more intricate.
December 4, 2009 at 8:49 am
Dear J_ag,
You may not believe this, but that was an accurate observation where you said investment bankers were writing energy policies. I ended up an energy executive because the gencos hired people like me to negotiate their contracts for them. Enron crashed because of investmenmt bankers and so did my company, although in my case, the crash started in the NYSE and not in Manila.
Fortunate for the industry, investment bankers like me have returned to our caves and instead write blogs or simply play the exchanges.
Now its the politicians who’ve taken over.
Dean
December 4, 2009 at 9:37 am
Dean just watch the present grilling of the Chairman of the Fed in the U.S. Congress.
I do agree though that the state must have an oversight role in the case of fiat currencies since the taxpayer is the ultimate guarantor of all debts.
However I prefer that the commercial aspects of banking be separated from the investment banking portion. Anyone willing to risk their savings with these guys or mutual funds (hedge funds) and private equity funds should have no safety net.
Let bond holders and equity owners take the hit. Interest rates are already based on risk outlook plus there are credit default swaps so markets must be allowed to fail.
Us small players envy the state guarantees that these guys get. That is the worse type of corruption.
December 4, 2009 at 5:01 am
Dear Chito C.,
That is a good point which I will take up with some people at the ERC. Save for one or two, matino naman ang mga iba doon.
The “firewalls” set up against the public were set up by the former chaiorman and he was in fact quite proud that it “freed up” time at the ERC not having to deal with people like you and me who were asking them to explain the technicalities.
Frankly, I was quite surprised when dealing with them before, I realized that the commissioners also did not understand many of the technical aspects they were deciding and instead left a good deal to their foreign consultants. This is not the case with systems loss but is the case with PBR.
Dean
December 4, 2009 at 12:48 pm
Dean:
Thanks for the info. I will get in touch with Mr. Ilagan. And I hope you can get the ERC to really find a way to protect the consumers. with the big players of the industry, one can never know what is going on behind the scenes.
So maybe there should be some kind of an educational fund for consumers (and maybe even for the ERC!) so we can all learn the language that only those in the power industry understand.
Many thanks and I will keep following your posts.
December 4, 2009 at 10:52 am
Actually, the System Loss can vary from 5% to 8%. No more, no less.
That is the Theoretical Range. We call it the Rule of Thumb
in formulating it. On “as is” basis, anybody can establish it with
the help of a Power Engineer. Considering all Philippine variables
and factors.
We urge the Consumer Groups and Advocates to stop this Legal
Pickpocketing of Filipino consumers. A 15% factor is too much already. They can easily Police the electrical wire transmissions for
electricity/power thefts. Which is their reason for the very high
factor.
December 5, 2009 at 8:38 pm
Dear J_ag,
If you are talking about investment bankers in the U.S., then I agree. In fact, there should be another Sarbanes-Oxley type of legislation that should prevent recurrences which are sure to occur because many of the crooks did not only get away, they were rewarded.
Regards,
Dean