Don't Get Mad at MERALCO and the Power Utilities – Get Even

If you generate your own electricity – what need do you have for MERALCO? 🙂 This was a question I raised after reading Miss Pedrosa’s note on our daily experiences of having to put up with power outages.. It does raise your adrenaline when MERALCO publishes its billion dollar earnings, in the midst of an outage – and to add insult to injury, you have a MERALCO collector waiting at the door. Then repeat this scene for a century – that’s one hundred years.


MERALCO’s 2003 booklet was stating something like “A Century of Service – 1903 – 2003”, foreword by Manny Lopez. To be more accurate, the title should have been “A Century of LOUSY Service” – or to paraphrase Ye Olde Shakeys – “What Service? There Ain’t None”. The market showed Shakeys the door, fortunately for MERALCO it’s a protected market.

An FB friend pointed out that:

Where I live, there are two private power distributors competing against each other. There are dozens of power generation companies also competing against each other. None of these companies are government owned.

Guess what, I only had a single brownout in the last five years. And that was due to a lightning striking a transformer.

Let’s see the figures:

Philippines (NCR) – 14 cents/kwh

Connecticut – 9.5 cents/kwh.

Oh, I just changed my power generation company a minute ago. Their electricity is cheaper than the last supplier. And the change was done online within 2 minutes in the comfort of my home. Competition results to better service and cheaper electricity. Philippines, wake up.

It will be easy to whip people into frenzy against MERALCO. But what next? Without an alterntative provider – MERALCO will have a captive market – PERIOD. However, with a little change in thinking we can seriously go off-grid – and generate our own electricity at a pace we can deal with. Or we can work with other consumers and leverage group buying power to find alternatives to MERALCO.

The following sections present doable solutions and recommendations – for anyone who is willing to pick up the ball and run away with it.

We need to look at the long-term (Strategic/Macro) and the short-term (Tactical/Micro) in coming up with actions that can be taken to address the electricity issue at various layers –

STRATEGIC

We need charter change – allow foreign investors to own majority shares so they can bring in the much needed funds that can be a boon to the country’s electric consumers. As long as that retarded 60/40 provision – Sec 10 and 11 of article 12 exists – protectionism will hit all industries and sectors really hard

I have my notes here – https://sanamagan.wordpress.com/2010/07/26/compilation-why-is-electricity-expensive-in-the-philippines/

Sicat pointed out the following:

Number one cause, Sicat says, is high generation costs. The main culprit is the high cost of contracts with independent power producers (IPPs) entered by the government at the height of the energy crisis in the 90s.

The second cause of high electricity rates can be traced to monopoly at the generation and distribution levels.

Third major cause of high power rates has been traced by Sicat to the high systems losses of electricity distributors including MERALCO which are paid by consumers.

Fourth reason is poor management.

Causes 1,3 and 4 are all offshoots of number 2 – monopolies that exist courtesy of the constitution.

For short – PROTECTIONISM WHICH PROTECTS THE INEFFICIENT LOCAL ELECTRIC UTILITIES IS THE CULPRIT.

Remove Sec 10 and 11, Art 12 of the Constitution – and unleash market forces.

TACTICAL

What can be done? Adopt solar energy – wean the consumer from Meralco.

Here’s an example of how small electric utilities/community cooperatives even transitioned from reliance on fossil-fuel electricity to solar powered energy.

India – httpv://www.youtube.com/watch?v=HGTO2Nm5lng

Ethiopia – httpv://www.youtube.com/watch?v=zjhwRHi51Rg

Bangladesh – httpv://www.youtube.com/watch?v=bJDF0T8lpAA

Tanzania – httpv://www.youtube.com/watch?v=SHgXR2cmVyA

The solar powered home electricity power generators units can be purchased and financed using the grameen bank approach – thereby making it affordable to the masa.

Communities can import the solar PV panels from China for the cheap.

Communities can also enter into home-based Solar PV panel making too as an extra source of income – same financing model – the Grameen approach.

Communities with expertise can also operate scaled down solar power generation units that can be used by a dozen households.

The metaphor is this – MERALCO = mainframes; off-grid solar PV systems = Desktop PCs. Don’t get mad, get even – and bring relief and prosperity to our kabayans.

Import the Solar PV in bulk while these are still tax-exempt. When the Lopez group of companies are finished building their Solar PV plant in Laguna – expect the exemptions to go away 🙂

OPERATIONALIZATION

As always – the journey of a thousand miles begins with the first step – treat this like a business. There should be an entity – “the face” of the initiative. Create an organization – it can be a loose group or a formal non-profit or it can evolve. Another option is to work with an existing non-proft – even a local credit cooperative.

All that is needed is seed money for a pilot program. Say, 20 houses in the hardest hit area. We can order the unit from overseas initially. Then install it and find the best configuration. It can be scalable.

Our local talent can reverse engineer the device and come up with a better model – and better priced, too.

It will mark the creation of a new industry – and a cost effective viable and sustainable alternative to fossil fuel-centric power from Meralco.

Imagine all those cellphone stores in the mall – selling PV kits.

The biggest motivator is income, savings, and convenience. Based on the video, the units retail at $200 – roughly PhP 8,400 per base module. Sell it on layaway. For those with more cash – they can upgrade the base modules and reduce their dependence on MERALCO.

Please see case study – [iframe: src=”http://energyaccess.wikispaces.com/Zara+Solar+-+Case+Study” frameborder=”1″ width=”100%” height=”250″ scrolling=”yes”]

Please see these various configurations in West Africa – if they can do it, so can we 🙂

Here’s the link to the West African project – http://www.slideshare.net/wwrob/solar-in-west-africa-projects-and-goals-of-energy-for-opportunity – many ways to skin the cat called MERALCO. It’s “show time” 🙂

[iframe: src=”http://www.slideshare.net/wwrob/solar-in-west-africa-projects-and-goals-of-energy-for-opportunity” frameborder=”1″ width=”100%” height=”250″ scrolling=”yes”]

All it takes is one pilot project to demonstrate success – have a fundraiser – a concert, dinner/dance, raffle, garage sale, an online donations page to showcase the projects and generate awareness about the program just like what this non-profit is doing – http://readpilipinas.org/ – am a volunteer 🙂

It’s not going to be easy, but it is definitely doable.

A few more ideas:

– the AIM has MBA interns who can help develop the concept into a sustainable business plan.
– revenues can be ploughed back into communities
– charging stations
– technician training
– maintenance contracts
– special financing via credit coops
– lobby for tax deductions on houses with solar energy
– scholarships fund for electrical engineers focusing on solar energy applications
– collaboration with IEEE – Institute of Electrical Engineers and DOS

Lots of models to choose from – these can all be blended and phased depending on the group’s comfort level.

Look at it (positioning the advocacy) as the Gawad Kalinga of Solar Energy 🙂

INSTITUTIONALIZATION

We need to sit down and craft a plan – then work out the plan. Do this in stages

1 – Organize/Incorporate – have a core group of trustees

2 – Have an initial project – (i.e. Ako ang Ilaw or something) – objective is to have a pilot that showcases the technology.

2.1 Identify source of Solar PV Units – get a quotation – to have an idea of how much money to raise. (i.e. start off with 20 units – or 50 units)

2.2. Knowing the cost – funds needed to buy the equipment can be raised in many ways or in a combination of ways – identify and phase in accordingly

2.2.1 – Dinner/Dance/Raffle for a cause – how many heads? how much per ticket? Cost per plate – i.e. get a top bar/resto /fun place – compute cost per plate – and add-on the margin needed – find out then how many people or plates need to be sold to cover one Solar PV device – that will be the working ratio, say 20:1 = twenty plates = 1 Solar PV

2.2.3 Have a Solar PV exhibits – showcase SMEs who offer such products

2.2.3 – Collaboration with DOST and IEEE – not DOE bec DOE has vested interests in bed with MERALCO

2.2.4 – Collaboration with CHED voctech – promote solar electricity courses

2.2.5 – Have a website that will serve as staging point for communications and updates on the issues at hand – as well as to showcase successes – to increase awareness on the issue.

3 – Start small at first and keep under the radar while R&D is ongoing. The last thing we need is for MERALCO to come up with regulation that houses with non-MERALCO solar PVs will be penalized.

4 – Refine the operations and shoot for sustainability – a foundation that serves as training center, supplier, and even operates as a federation of community-based Solar PV providers.

There’s a lot that can be done – and it can be done.

Someone received a bill from MERALCO for nearly PhP 40,000 – that’s a whooping $952 – for a lesser amount – get something like the Starfish – http://news.cnet.com/8301-11128_3-20013704-54.html – $800 only – and permanently reduce the reliance on MERALCO for life.

BLENDED SOLUTIONS/DAILY APPLICATION

We can also integrate bio-diesel, wind, bio-mass into the off-grid system.

Don’t do it one time – gradually implement – so you can control your costs. Like any migration – there will be a transition period when you have both systems running in parallel.

From your base unit – start with a separate line – and transition from lowest power consumption to highest

1. light bulbs
2. electric fans
3. radio and TV

Then – start looking at Solar PV powered appliances:

1. Refrigerators – http://bit.ly/bJvKtR – $600 range

2. Airconditioner – http://bit.ly/ch4j3w – -$400 to $1000 range – more at http://www.alibaba.com/showroom/solar-air-conditioner.html

3 – here’s a nice set – $300 only – http://www.alibaba.com/product-gs/355025590/Solar_TV_set.html

4 – here’s another one – http://www.alibaba.com/product-gs/281005246/Solar_power_station_to_drive_lights.html

5 – Panels – $800 in the US –  httpv://www.youtube.com/watch?v=RmbhQjmcYTQ

Technical practical details – batteries – available locally – marine batteries – httpv://www.youtube.com/watch?v=0RuHdd93T6k

6 – Off-grid living – httpv://www.youtube.com/watch?v=Seaw5S3lhSs

The key to lowering the price is bulk purchasing – by consolidating the community’s individual needs into a bulk purchase order – we can leverage the group buying power.

China has a lot of low-cost solar energy – that we can already use. Take advantage of the global market – and the tariff exemptions on renewables capital expenditures.

FINANCING/COSTS

One of the main drawbacks of Solar PV has been the cost. With the entry of China – costs are radically lower than US or European solar PV panels. Price improvements are introduced by introducing Grameen-style Financing among credit cooperatives – httpv://www.youtube.com/watch?v=ZkpXEPFPT2o

Here’s how a program was financed and made reachable to the masses – httpv://www.youtube.com/watch?v=6YTNWRgHYqw – Grameen Shakti won an Ashden Award for Sustainable Energy in 2006. To find out more visit the link above and check out the Ashden Awards Blog http://ashdenawards.blogspot.com/

Grameen Shakti has sold and installed over 65,000 solar home-systems (SHS) in rural Bangladesh, and brought major benefits to its users. Nearly 70% of households in Bangladesh are not connected to the electricity grid and depend on kerosene for lighting. This includes most rural areas and extends as far as the fringes of Dhaka. There are plans to extend the grid, but there is little prospect of substantial change in the foreseeable future.

By selling SHS, Grameen Shakti has provided lighting, communications (especially mobile phone charging) and TV, and has increased employment opportunities. It is the largest single installer of SHS in Bangladesh.

This impressive number of installations has been achieved by enabling users to purchase their systems on micro-credit with affordable terms, tailored to their specific needs. Funding for the micro-credit system comes from the World Bank and GEF via the Infrastructure Development Company Limited (IDCOL) which provides Grameen Shakti with both subsidy and concessional loans. The cash pool from credit repayments will enable Grameen Shakti to continue the scheme when the subsidy, which is being phased out, ceases in 2008.

Grameen Shakti has also started a network of technology centres throughout the country to manage the installation and maintenance of SHS locally. It emphasises the importance of technicians who know local customs working through local branches, and has trained 2,000 (mainly female) technicians. It aims to install 100,000 systems by 2006 and sees the potential to install one million systems by 2015.

EPILOGUE

Forget about rallying against MERALCO – get to the heart of the problem:

1 – Address the structural defect in the economy – Open up the power and distribution market, scrap the 60/40.

2 – Create an off-grid industry – generate power at home and be rid of MERALCO forever – or at least radically reduce your dependence on MERALCO by using off-grid renewable energy.

3 – Leverage group buying power – consolidate communities into consumer groups.

Don’t get mad, get even – hit where it hurts – the wallet.

Take control of your electric power – you have the liberty – you have the power, use it.

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19 comments

  1. Andrew Tuazon · ·

    I would like to mention that we have a company in the philippines that produces PV arrays. For me, the biggest issue with solar power is how to store that energy when the sun isnt up, that would mean lots and lots of batteries that would need replacing every few years. The renewable energy act was supposed to setup a way for homes with renewables to sell back their excess energy to the grid so that even without batteries, you would still have savings. but as of now i havent heard anything about it.

  2. geeky Mary · ·

    TV Patrol had a feature on a Barangay (forgot, sorry), who banks on solar power for their electricity during the night — through the help of an NGO. They didn’t mention the name of any NGO who helps provide solar panels but: GOOGLE. 🙂

  3. Hi Andrew,

    Don’t wait for the utilities. There’s a market waiting out there. The batteries will improve and get cheaper as the technology matures. Come up with lay away, installment plans – work with a rural bank/leasing/financing institution/community credit coop – they pay you in full, they collect from the client.

    There’s a lot of battery suppliers in China – use alibaba.com

  4. Meralco and our electricity woes is the best example of too much government intervention and the ability of special interest groups, like the Lopez Family, MVP, and other big business use the government for their own self interest and how we, ordinary people, are often times duped by their machinations.

    The solution to our ills in our country is to limit the government to just defending our country from foreign invaders, maintaining peace and order, settling disputes through courts and dispensing justice through courts. Other than that, the government must give the people to decide on their own. The RH Bill is also a form of too much government, using good intention to mask its true color. Let us pray that more and more Filipinos would wake up into the reality that our government is the real problem and never the solution. A system that depends on a virtue of the leader or those who operates it is a bad system.

    Its time for a revolution. Be a libertarian and limit our government. And by the way, avoid politicians that has a messianic complex, like Pnoy.

  5. Hyden Toro · ·

    Form a cooperative systems, some sort of Barangay level. Then, you can have Solar Power Electricity Generation. One Megawatts of Grid can power approximately 500 homes. Turbine or Wind Power Electricity Generators can be placed on top of Houses, as alternative or support Generators. Must be placed fifty (50) feet from Ground Level . This will break the monopoly of the Greedy Oligarchs and the Hacienda Luisita Mafia. It worked in Europe. It will work in the Philippines. We are in the Tropics. We have a lot of Sun and Wind.

  6. Hyden Toro · ·

    Germany has advanced Solar Power Technology. Denmark has advanced Wind Turbine Power Technology. you can ask these countries for assistance…

  7. I think, considering the weather conditions, we can’t exactly go all out solar, especially during the wet times. Why not wind energy–Ilocos writ large, with solar batteries to augment the power supply during summer?

  8. XXXXXXXXXXXXXXXXX · ·

    For storms, we can use Windmills.

  9. My point exactly.

  10. Andrew Tuazon · ·

    You cant use wind tubrines for storms, the turbine will wear and tear fast. Storms are also unpredictable sources of energy, like we have had only 10 storms this year. the Ilocos norte wind turbines currently only produce 25MW of electricity and they cant be relied upon for whole year electricity demand.

    The country currently has around 13GW of installed electricity production, a great percentage comes from natural gas from batangas. I’ve read some ideas by the DOE to promote distributed energy production compared to how like 25% of the country’s electricity comes from batangas’s plants. Like how each island should have plants to produce their own electricity.

    There is currently a 1MW solar PV plant in mindanao with plants to expand to 10MW, the problem with solar PV is that the efficiency is still not high enough to produce electricity cheaply (the positive is that it is modular).

  11. It’s Mindanao. Security issues would probably hound the plant… unless it’s in a safer part of the island.

  12. Hyden Toro · ·

    Solar Electric Energy can be stored in reserve in Batteries. Learn more about the advanced Solar Electric Technology. Wind Turbine Electric Generators miniaturized, can be placed on top of houses.,as support for the Solar Power Generators. It is called Hybrid Alternative Source of Energy. Solar Panels can be placed on top of houses and buildings…they are widely using it in Europe…this is frightening the Power Companies…same as Meralco is frightened. It invested in infrastructures…then, no one will be buying its products…This is why the Oil based Energy industry is struggling in its grip to survive…Alertenative energy is the energy of the future…

  13. Meralco and our electricity woes is the best example of too much government intervention

    It rather helps that the Lopez’s had made it easy for them to operate with the government due to lack of competition. Goes all the way back to the 60/40 restriction laws set in the constitution in 1987. They win and the public aren’t given much of a choice… or good service.

    The RH Bill is also a form of too much government, using good intention to mask its true color.

    Yeah, because the anti-abortion provision in the constitution surely was too little intervention for the benefit of the people. Good call there man.

    The democracy is a pseudo-monarchy. The royalty are still flourishing, the peasants still not realizing their potential only hoping to be vassals in the future. And chivalry has long died.

  14. miriam quiamco · ·

    In all of these views, thanks by the way for posting, I have not seen any big foreign capitalist funding the local ventures.  It seems to me that people who are involved in solar businesses in the countries mentioned above have gotten inspiration either from NGOs or from enterprising members of their communities.  What we need is sound policy to encourage this kind of energy business of their  communities.  The service centers located in remote parts of the each country with trained electricians have made the difference.  Certainly, imaginative Metro Manilans could beat Meralco this way, but with the newness of the technology and the imagination it requires to install one system in one’s home, it will be a long way down the road to be able to get even with Meralco.  Meanwhile, the stupor and people’s passivity will let Meralco-type oligarch company  get away with murder.  

  15. Isn’t there a farm that’s self-sufficient power-wise? I forgot the name.

  16. Hyden Toro · ·

    Many wind electric power farms and solar electric power farms thruout the world. The Philippines is a century behind in technology, compared to industrialized countries. We are too much preoccupied with Politics; and in cycles of repeatedly electing incompetent and self serving leaders…The key here is: to form power farm cooperatives to generate electric power. You save power lines; you can generate power in the remotest parts of the country. It is clean; low maintenance; and will not pollute the environment. More researches on alternative electric power energy are being done by advanced countries…

  17. Hyden Toro · ·

    You don’t have to wait for foreigners to solve your problems. You solve your own problem; there and then…The “Can Do” attitude in us has been destroyed by these imbecile leaders. “Umaasa na lang tayo sa mga Kumag na ito. Parang “Captive” ang mga boto natin…” Look at Erap Estrada distributing rice, tuyo, noodles, etc…to poor people; to get their votes…”Alisin natin ang “attitude” na iyan…

  18. I meant a farm here.

  19. The Lazzo · ·

    And then there’s Chinese-branded reliability.

    The problem is there’s no “middle” yet between ultra-expensive Western technology and you-get-what-you-pay-for Chinese technology.

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