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Leave It To Pete ...

... to get the words eloquently right on the Meralco Monopoly issue.

"The letter is making a mockery of the ERC and its existence as a regulator. Malacañang has no authority to decide on the issue of competition. It is the height of arrogance on the part of Meralco not to recognize the authority of the ERC."
- Pete Ilagan

I had drafted something along these lines, though not nearly so punchy, and dropped it in favor of a different approach.

Pete, I'm convinced, is just using satire to make some very important points - and I'm not sure everyone is listening appropriately.

"Let them eat cake!"

The Cantanduaneños know the score and where to send letters too.

"Admiration"

Jove is talking sisig today.

Oh yeah, baby.

Meralco Monopoly

Actually, Abigail Ho had a pretty good follow-up article in the Inquirer today, I thought.

I am completely unconnected to the Meralco-Government deal. That's probably good; I can comment on it without conflict. But I also haven't even seen the letter sent by Meralco to GMA. So let me be clear, I'm not exactly in the loop on this.

Here's the setup: The "end of Meralco monopoly" referred to in this article was actually promulgated in the EPIRA law (Electric Power Industry Reform Act) enacted in 2001. And it's only a partial lifting of their monopoly - they retain, for a good while, a monopoly on most of the services they are providing today.

Today, all distrubution utilities have a monopoly on virtually all elecctric service within their franchise area. That is, no one else can supply you electricity but the local distribution utlility. They provide the wires for delivering the electricity to your door. They procure and provide the electricity itself (from bulk suppliers or generating plants) and they do all the billing.

After certain conditions are met in the industry restructuring under EPIRA, the ERC is to allow large industrial customers - those with an electric demand of 1 MW or more - to seek power supply from alternative power suppliers (generators). But they still must use the local utilities wires and billing services. We call this "retail access" or "retail competition".

About 70% of your electric bill is associated with this "supply" as opposed to the "wires and billing" stuff. Now you can start to see why we had to go through unbundling which resulted in your bill having so many line items on it today.

For reference, a 1 MW load is roughly equivalent to 50 or so large, air conditioned homes (I may be off on this a bit - so feel free to correct me). Over a number of years, the size of a load that is permitted to seek alternative suppliers is lowered until eventually any Tom, Dick, or Harry can shop for his electricity supply (but not his wires needs).

Almost all the conditions are just about met for this first step in retail access except for one big elephant - the privatization of 75% of Napocor's generating assets.

So I presume that the gist of the "unconditional offer" is that Meralco is willing to let this first step toward retail access (allowing 1 MW loads to be contestable) go foward even without the necessary privatization of 75% of the Napocor assets.

If that's that's the case, then indeed there seems to remain the issue of getting around the EPIRA mandate for 75%.

Update: I've made an even more geeky observation over on my other blog.

Damn!

I've been kind of hiding behind a tree since I saw the article on "Meralco monopoly over" and now MLQ3 calls me out.

I'm boarding a delayed PAL flight in SFO as I type and don't have time to fully respond. But this is a bit of political hype. When I hit the ground in Davao I'll have more to say.

Update I'm now blogging from the PAL lounge in Manila waiting on my Davao flight, but writing the response to this is taking longer than I thought. Maybe tomorrow.

SFO Manila

I fly SFO to Manila about three times a year, on average. And every time I eat at at Osho at the Philippine Air Lines end of the International Termimal. I'm eating my usual shashimi now with a glass of chardonnay as I'm connected to the internet through T-Mobile's wireless day pass for $10.

Thanks to a PAL screwup up that failed to recognize two SFO-MNL flights I took in December 2005, I've lost my privilege of Mabuhay check-in and Mabuhay lounge when travelling coach (which I am this time) So I had to camp out at the front of the coach class line to make sure I had an aisle seat.

But that's fine. I still had a nice chat with a certain Dr. Yap who is making his annual pilgramage to the Visayas for about three months to provide, pro bono, medical care to people in the provinces. He gave me a great strory of his family's experiences throughout Philippine history since 1901 when his grandfather, an American, came to the Philippines to teach.

You know, people have amazing stories to tell. It's great to hear them.

Coffee Business

I stopped by The Coffee Works in Sacramento this afternoon to pick up a couple of pounds of fresh roasted coffee to bring back to Davao.

The owner happened to be in and joined in the conversation I was having trying to decide which beans and roast to get. He said something about his roaster, about which I asked some further quesitons so he took me back to show me the thing.

The green coffee was stacked up against the wall in the standard 70 kilogram burlap bags. I found out that roasters are sized by how much of a bag they can roast at one time. His was a 1/2 bag roaster - that's about 75 pounds; sounds like a lot to me.

He told me the name of the guy who patented this baby and where it was manufactured - but I forgot the details. And, most important, I forgot to ask my guide his name. Gee.

In these large roasters, the hot air flow keeps the beans completely suspended to prevent burning and the process has the side benefit of blowing away the junk (my word, not his, for husks and dirt) so it too doesn't scorch and give a bad flavor to the bean - something smaller and home roasters are only partiallly able to do.

He said the secret in this business is to maintain a good volume so that you can continually have freash product. He said he does a lot of wholesale bulk business - not because he likes doing it, but it enables him to keep his volume up and product fresh.