Shocking Electricity Charges
Power. Not the political kind. Nor the kind associated with professional athletes. Not even the awesome power mother nature can unleash. This week’s topic for the Small Business File is simply about power of the electrical kind.
This past week I needed to get a temporary electrical permit. It is for a project I have been working on and is at a new site different to where I live and have a business. When I went to the local electrical cooperative, we were told that the permit would not be processed until the account of the previous occupant was settled. Now, imagine how I felt when I was told we’d have to pay P17,000.00 Pesos, because that is what the previous occupant had rung up in charges and skipped out on. I was a little bit shocked, but perhaps perplexed is a better word to describe my wonder.
Electric Maters
Of course I refused to pay the charges, but the billing clerk told me that was their policy. I proceeded to ask if it would be OK for me to charge anyone at my coffee house P1000.00 for their cappuccino, simply because they happened to sit at the same table as a previous occupant who skipped out on paying their bill. Of course, this was a fictitious example, as no event ever happened, but the example was provided to demonstrate how ridiculous such a policy is. To me, it is just not possible to even think that anyone with absolutely no connection to a previous account should be held liable for the actions or account of another.
It didn’t matter. I was still informed: “That’s our policy, sir.”
So, I did what needed to be done. I asked for the person in charge of billing to write it on company letterhead that it was their policy to force new accounts to pay the delinquent accounts of total strangers before their permit could be processed. I also asked that the letter stating that as their official policy be signed by the officer in charge.
In 10 minutes, my permit was processed, with no more questions asked, and no more word of any outstanding charges to be paid.
What happened to me at the electrical utility is not likely to happen to any of you, but it could. The real issue is how difficult it can be to get your utilities lined up when opening a business. There is a lot of red-tape. Forms to be filled out. Lines to wait in to pay deposits and fees. Then more lines to take that paperwork to. In my case, after spending a whole afternoon getting the permit signed off on, I was told to come back in 2 days to get my free meter and 30 meters of wire. After days of getting my paperwork together, then a whole afternoon arguing as to why I should get my permit, I was just happy to have the permit approved. I could wait the two days, even though it was an inconvenience.
After two days, now Thursday, I returned to collect my meter and 30meters of wire, but was told “Sorry, sir, no stock”. Come try again next Tuesday. I left. What else could I do? Again, the point here is to state the obvious: don’t expect things to run smoothly when dealing with utilities or many other government or quasi-government line-agencies. Sometimes things work out great, but many times you’ll face red-tape from bottlenecks like this. It’s part of being an entrepreneur in the Philippines!
There are a few other things to consider regarding electrical power in the Philippines. Commercial accounts pay higher rates per kilowatt hour than residential rates, so please remember to take this into consideration when costing out electricity charges in any business planning activities. And because electricity in the Philippines is in general much higher than in other countries, there is a real need to watch electricity usage very closely. If you’re not an environmentalist, you better become one fast! If you don’t try and conserve electricity, you just may find your utility charges run higher that just about every other input cost you may have in your entire business. That’s no joke. You read it correctly. Utility charges for commercial accounts are extremely high and a major obstacle to many business ventures, small or large.
So what can we learn from today’s article?
First, build in very large allowances of time during start-up to get things like utilities lined up and in working order. It will take much longer than you could ever imagine.
Second, be prepared to pay higher rates for power utilization as a small business owner.
Third, be energy conscious. Spend a bit more and get energy-efficient appliances. Use energy-saving light bulbs wherever possible. Have staff turn off all lights and appliances when not in use or needed.
Good luck to all of you facing similar adventures in power utilization!
Nuclear Energy in The Philippines
I must confess, I was never a friend of nuclear energy. I really got keen of hearing, when Philippine Energy Secretary Angelo Reyes admitted that tapping nuclear energy as a possible source of power is an option that the Department of Energie (DOE) wants to take.
Now I really like to use the term “however”. Yes, thanks God! “However”, Reyes said, “let’s not get into nuclear power until we are dead sure (?) that we are ready. And, we are ready if we have stakeholder support.”
Well said, Sir.
It was also very good, that Reyes mentioned the Bataan Nuclear Power Plant, which was built and then eventually mothballed. It is indeed the most expensive nuclear power plant, which one set up but is not operational.
Of course, we all know, that nuclear power has its inherent dangers which the whole world is trying to solve – also in my home country Germany. Since many years some people tried to convince me, for example, that there are also advantages as well.. The nuclear power is baseload and will remain stable for as long as 50 years. It provides us steady and cheap power in the long run.
So far so good… .
Anyway, as we could learn from a press release: The Philippine government is planning to start up its first 600-megawatt nuclear power plant by 2025, based on doe data.
We’ll wait and see and have a cup of tea… .
Blackout again and again!
Whats going on with Davao lately? Ever since Thursday until yesterday blackout (we call it here brownout) twice a day. It’s early Wednesday here so maybe later it will have another blackout again. I am also wondering if its in Davao and a little bit in GenSan only. I spoke with my sister when we had our first blackout and she said they also had blackout. It’s really annoying. I never heard any advisory on TV or radio about it. I don’t know if they did and we just didn’t see and hear it. Before they usually give an announcement and the details even on TV and radio AM/FM and newspaper too, but this time I didn’t see one.
The thing also in our subdivision, our next door neighbor often has power when we don’t have. Maybe they experience the blackout too this time. In the past they are okay when we don’t have power. They are on a different line than us. I guess we are on the line with the commercial places on F. Torres Street and Bajada area (this is the place where most of the coffee shops and restaurants are located). So, we are the ones that have blackouts most of the time. Somehow our next door neighbor isn’t connected to the same circuit and they have power most of the time.
I hate when its blackout especially during night time. As you know a lot of crimes happen then. We have to be on the lookout then too. We always hear stories about somebody climbing (akyat bahay) over the fence and getting anything they could inside the house. Some even murder the homeowner and the people inside. When its brownout its good to lock all the gates and the doors. That’s what we do now. I haven’t heard of any gangs here in Davao. But you’ll never know. I saw some graffiti on some walls here but I don’t really know if its from somebody who just wants to write something. As always just stay safe.
Last Friday I went to Aaron’s school. They had program for the kids who will receive some awards. The program started at 12:30pm. Just right when the program started everything went dead. The person next to me immediately said “brownout again.” I think it lasted for 30 or so minutes. The staff didn’t anticipate this brownout so we waited for them to put the karaoke machine that uses batteries so that they can use the microphone so the program may continue. It took them like less than 10 minutes to change, the only thing, it was hard to hear the person talking on that microphone. Everybody was really glad when the power was back again. For one we can hear the program better and the big fan was going again! With so many people the fan is not enough. Luckily its an open air area where the program was, so at least some air was flowing. I am not used to bringing a small fan (Paypay) like a lot of the ladies in the Philippines are bringing in their purse. I’m so glad it was over in 2 hours because I was already sweating.
It would be a week tomorrow since its been brownout everyday. I hope that its going to be better soon. I think people are getting tired of this. When calling the power company the operator will just say that all circuit are busy now. I’m pretty sure that people are calling them and asking whats going on? When we had the brownout again today I called up my sister too and its also brownout in GenSan. It must be the whole Mindanao thats brownout everyday?
What do you think Mindanaons?
The Philippines as an Energy Tiger
One of the ‘downers’ about living in the Philippines is the continual nay saying and horrible self image of most Filipinos toward their own country. Even people in the position top know better seem to be addicted to the theme of couching everything they say in the “Oh poor us, we’re a third-world country that can’t get anything done” mode. Government routinely trumpets the “heroism” of OFW’s (Overseas Filipino Workers) exporting the country’s precious education and talent resources to other countries who didn’t make the investment, but reap the benefits. Anyone who wants to work as an OFW should certainly have the right to, but hailing them as “heroes” when in fact they are primary examples of the failure of the system ought to stop.
Every Filipino working as a nurse in the US by necessity, or every engineer cleaning toilets in Saudi Arabia because it pays more than being an engineering teacher in the Philippines is not a ‘hero’, but instead ad example of the government and especially the media conglomerates of the Philippines being willing to take the easy way out … accepting money as being more important than principle. It rankles me.
Take one very important modern-day issue and look at how the Philippines deals with it, rather than how they “might” deal with it if the pride of the Philippines and its people were more important than a ‘fast buck’. Energy.
Unlike the US or an even worse energy addict, Japan, the Philippines can today satisfy 100% of its energy needs internally, if the present leadership decided not to listen to the “scriptures of George Bush” and other noted Saudi Arabian apologists. To a large extent the Philippines government and its academic community already knows this, but perhaps in the spirit of delicadeza or some other misguided effort to avoid offense even if it is needed they are reluctant to promote their own accomplishments. Great example of personal ‘meekness’. Horrible example of how a government is supposed to lead.
Let’s look at three major energy areas where the Philippines could turn from beggar to baron almost overnight:
Oil: I’m a big believer we should wean ourselves from much of our oil consumption much more aggressively than we are doing now. But, of course, we can’t do that overnight and oil will be an important source of fuel for decades to come. In some ways, that’s the bad news. But the good news is, the Philippines has oil! Now that’s good news in a world still overly dependent on it. Not in huge volumes yet, but the Galoc oilfield shows that it’s out there. I’ve little doubt more will be found. More on the oil and other misguided Philippine ‘heroism’ here in Peter Wallace’s column, a long-time out-spoken foreign commentator here in the Philippines.
Now if the government would spend half the amount of free ‘jawboning’ on this issue that they have spent ballyhooing a second-rate boxer beating a third-rate cross-dresser as a “Filipino hero”, we might get someplace.
Expand the operations in Galoc and don’t sell the oil on the open market like the other OPEC opportunists, pump it directly into the Philippine economy … or better yet, sell it at a big premium to China who is already a partner and needs oil desperately. Let’s make home-grown energy production the Manny Paquiao of the future, I doubt even Manny himself would object.
Bio Fuels: Now of course Galoc can’t immediately supply the entire energy needs of the Philippines. But it can be stretched out an made much more profitable with bio supplements. When the Philippines was the ‘Tiger of Asia’ in the 1950’s, two of the major crops that powered the economy were sugar and copra.(derivative of coconut production). Now the ares that were once rich with this trade are pretty much poor … the island of Negros is a prime example. Can you imagine how much ethanol can be produced in just one season if the cane fields of Negros were put to use making this important bio-fuel? In warm climates like the Philippines ethanol can be used in much higher percentages than in cold countries, and it’s nearly energy-free to make … the distilleries to break down the sugar are relative cheap and most of the energy can come from bagasse, the sugar cane production waste.
Bagasse , by the way, is typically just burned in the open air these days, causing pollution when it could at least be used in existing coal-fired power plants that the Philippines still depends upon. Cash crop, energy independence, very little infrastructure investment. Is the Philippines waiting for Chevron or Total or some other foreign oil giant to tell them to take the first step?
In addition to Ethanol type fuels the Philippines has millions of under-used hectares that could be put into bio-oil production, including palm oil from the nearly dead copra plantations. There are even better oil plants as well, like jojoba which will grow on higher ground that can never be effectively irrigated for rice and other ‘wet crop’ production. Like ethanol, jojoba oil can directly supplement diesel fuel at very low infrastructure costs .. while providing honest work for Filipinos in-country.
I’ll touch just briefly on Methane here as well. The University of the Philippines is already a would leader in setting up small-scale, village-sized ,methane production systems … bringing light and power to folks that would have none of they wait4d for the Meralco’s of the world to do the math. Methane digestion removes manure from the environment, captures and uses the otherwise highly polluting gas and the residue after digestion is excellent organic crop fertilizer. India already has several small cities running exclusively on methane production from dairy farms. Just recently my colleague Randy C. reported on a dairy farm going to their own methane production to offset power costs.
The hardware and the techniques are well know and within the means of small business … if only government would quit the propaganda that says we are dependent upon the oil princes.
I’ve saved the “big gun” until last. Geothermal.
One of the combination blessings and curses of the Philippines is that it sits on the Pacific “ring of fire”, a very active geologic zone where tectonic plates are colliding and volcanic activity is frequent. Nobody can harness a Pinatubo or a Mayon when they decide to erupt.
But the blessing part is, almost every large island has active geothermal areas where natural steam is available at usable depths under the earth.
All modern electric generation, whether coal, oil , nuclear or solar-powered is based on heat making steam to turn a turbine to power a generator.
The Philippines already has a world-class geothermal plant on Leyte (which even powers much of Cebu as well) and on Luzon. There may be others, and there ought to be many more.
The technology is well advanced, the technical knowledge is already available in the Philippines and the environmental benefits as well as the freedom from fossil fuel dependence is wonderful.
Has anyone every heard even a minor government official or a local newscaster refer to the Filipino engineers and technicians who are already making geothermal work, and work economically as ‘heroes’?
This is much more an issue of attitude and leadership than it is an issue of technology and finance. As long as the Philippine government values opportunistic boxers and foreign laborers as more ‘heroic’ than the Filipinos who apply their schooling and make things work here in the Philippines it is unlikely we’ll see the country live up top its true potential.
We need more Filipino flag waving for the right causes and less reliance on the World Bank and other countries who have no interest in the Philippines except cheap labor.
A re-definition of heroism is long overdue, methinks.
There's oil in them there islands!
October 22, 2008 by MindanaoBob
Filed under Bob, Feature
Did you know that they have struck oil in the Philippines? It’s true, it happened 11 days ago, in an area west of Palawan Island. Currently, they are pumping between 18-20,000 barrels per day of what they are calling Palawan Light Crude. As far as I know, this was the first attempt at oil exploration in the Philippines, and it’s a success! Twenty thousand barrels per day is not a huge amount of oil, based on worldwide standards, but this is the first attempt at pumping oil in the Philippines, and that amount is nothing to sneeze at either!
Over the years, there has always been speculation that the Spratley Islands has oil reserves, but since the Spratleys have always been in contention between a number of countries, so far, nobody has even attempted to exploit the reserves there. For those of you who don’t know, the Spratleys are a group of over 100 islands, islets and reefs that are west of Palawan, and are currently claimed by The Philippines, China, Taiwan, Vietnam and Malaysia. From time to time, each of these countries places a contingent of military troops on the islands to push it’s claim of soveriegnty. But, so far, nobody has been able to take sole control of the Spratleys. By the way, the Philippines calls the Island group the “Scarorough Reef.”
But the Philippines is not drilling in the disputed area, it is actually just drilling within undisputed Philippine waters, in that general area. Right now, the goal of the Philippine government is to become 60% energy independent by the end of 2010. Imagine, if things like wind power, solar and hydro power were added to the mix, I firmly believe that the Philippines cold be at least 80% energy independent within 5 to 10 years (provided that the oil fields continue production over this amount of time).
In addition to the current oil production, and the Spratley Islands possible future production, ExxonMobil is expected to start doing some drilling in the Southern Philippines by mid-2009 as well, although I do not know the exact location.
One thing that kind of surprises me is that this discovery of oil, and the ongoing production seems to be rather low-profile! It would seem that the Philippines would be playing this up and “making hay” with it. Good publicity is always a good thing, and it would seem that the country could really get some good publicity from this event.
The first shipment of oil from Palawan is expected in Manila in the first week of November. Perhaps when it is delivered there will be a big publicity event. I would imagine that the President will be there to meet the first oil tanker arriving in the Nation’s Capital. Wouldn’t you if you were President?
With these kinds of activities already becoming an reality, can you foresee the day when the Philippines could become an oil exporting country? Can you imagine the Philippines actually becoming a wealthy nation? How would that affect your plans to live here? It would make the place an expensive part of the world to live in. Personally, I don’t think that will happen, but with the current success near Palawan, I am quite excited that the Philippines could be looking at a real plus for it’s economy, and a success, which is something that is rare here, it seems.
How Much Government Is Enough Government?
I was casting about thinking over several things I might write about this morning when my friend Bob kind of made my decision for me. Bob wrote a post about the advantages of free market versus government managed economy and some of the comments he received absolutely blew me away.
I’m a bit older rhan most around here … I can clearly remember sitting with my mom and a map and the radio listening to the news from Korea every night. I particularly remember one night when the news came over the air that Joseph Stalin had died. I cheered and my mom scolded me for being un-Christian and rejoicing in the death of a fellow human.
One of the reasons I felt that Stalin’s death was something to be glad about was my already well formed impression of how evil and oppressive the Socialistic form of government was and I thought that perhaps Stalin’s departure from the scene might herald a positive change.
Well, it took longer than I thought but most of the former USSR countries are doing well with free market economies. It amazes me quite a bit today how my own US has changed over the past 50 years or so. The Federal Government is now deeply entrenched in areas where, in my opinion (and in the opinion of the authors of our Constitution) they have no business being. One comment I saw to Bob’s post particularly caught my eye. Someone asked, “Why is the government allowing all the prices to climb while our salaries stay the same”?
I have news along those lines … it is not the responsibility of a free government to control either prices or salaries. “That government is best which governs least”.
OK, so I have shown my colors, but don’t get me wrong, I’m not going to start a revolution or even run for office (heaven forfend). In general I would win no points from Thomas Jefferson or from Thoreau (whos quote that is above). I’m a former government employee with a pension, actually, and I don’t advocate violent change.
But if you feel at all strongly about those sorts of issues, you have yet another reason to think twice about moving to the Philippines, long term. This is the land of “government at any cost” from what I have seen. And it is nowhere more apparent than in the interaction between government and the economy.
Bob’s post that I mentioned earlier had to do with the elaborate inflexible process of regulating “PUV” fares (Public Utility Vehicles) the common Filipino term for taxis and jeepnies. Buses, both ocal and long-haul are also technically PUV’s but their fares are set by another completely separate and just as convoluted process.
I suppose there is some valid argument in saying that there is justice in the government regulating jeepney fares because, after all, the fares might otherwise climb so high that poor people couldn’t use jeepnies to get to work. But if you have even the most rudimentary understanding of business and logic you can see the fallacy in that common argument. If fares climb so high that common folk can’t afford them, then those folk won’t ride jeepnies and drivers will have to reduce their fares until they are making a profit. It is amazing how many people never learned this kind of simple object lesson in ll their long education.
It is completely unnecessary for the government to intervene in this process, and in point of fact such government intervention insures that everyone, rich an poor pays more than the real value of a jeepney ride, because even if a driver wants to ‘hold a sale’ and carry people for less in order to fill his seats, the government takes away his right to do so … and someone has to pay all the bureaucrat’s salary as well
While researching some writing that I am doing on alternative energy ieas on my PhilFAQS.com site I found a company in Manila who already has a commercially viable all-electric jeepney on the road that not only runs almost 100% on solar energy, but will have zero polution. They claim they can sell it for less than a new conventional diesel smoker jeepney.
Will this work long-term? Is it economically viable? Danged if I know, and danged if we’ll ever find out. Why? Because for nearly two years now they are still waiting for the Land Transportation and Franchising Regulatory Board (LTFRB), the government ‘protector’ of all Jeepney drivers and riders, to give them permission to place it in revenue service. Why should they even have to ask any government permission?
Couldn’t be because the major oil companies and the government are in cahoots to insure the demand for diesel fuel doesn’t drop, could it? Naw, that can’t be, I promised no conspiracy theories.
Closer to home, three years ago a cousin by marriage, electrical engineering graduate and a pretty sharp young man, now in his 30’s, bought a franchise from a Chinese company to sell electric scooters and mini-motorcycles in the Subic Bay Economic Zone and surrounding cities. Cute little scooters, mass produced, well engineered, simple as a stone … charge them overnight like a cell phone, they run all day an 40 kph (way more than you can drive in the city traffic) and are a great source of transportation for the common man. Again, no direct fuel costs and absolutely zero pollution.
Never sold a one in two years. Went bust and is now working for someone else. Why didn’t he sell any? It wasn’t becuase they didn’t work … they are proven technology and actually work great.
They could not be registered to drive on public roads … because the Land Transportation Office license plate people will happily sell even a decrepit, smoke belching motorcycle a license plate as long as the owner has a title which states the vehicle’s engine displacement. An electric motor has no ‘displacement’, thus, no license plate. Appeal after appeal has been filed but after three years, no decision. Eventually the LTO will render a decision, but the business is gone … how can investors wait years with no return on thier investment.
And it’s clearly the job of the “government” to protect us all from unproven new technology like electric-powered non-polluting vehicles (which have been the road since the early 1900’s) isn’t it?
If you are into free markets and a free society, the Philippines might not be a happy place for you to live, believe me. If you like waiting and hoping and wishing for ‘the government’ to cradle you in their arms, come on over. You know ablogging freind of mine once was advocating a new government agency to regulate shopping malls charging parking fees in their own parking lots … “Free parking to be Mandated by the Government”. Wonder why I stopped reading that blog? ;-)
Gasoline is expensive in the Philippines
January 31, 2007 by Mindanao Bob
Filed under Bob
The cost of Gasoline here in the Philippines is still very expensive! I saw a news report that the average cost for a gallon of gas in the USA is now down to $2.09 per gallon.
Let’s see what the equivalent cost is here in the Philippines.
Here are the formula’s we will use:
1 Gallon = 3.785 Liters
$1 = P49
So, one gallon of gasoline costs $2.09 in the United States.
Gas here in the Philippines is averaging P38 per liter.
So, gas in the Philippines costs $2.94 per gallon! Wow, it is way more expensive than in the USA. As a matter of fact, the price here is about 30% higher than customers pay in the United States.
