Home>Editorial>Opinion>Right sustainability track; wrong system loss, faulty claim

Right sustainability track; wrong system loss, faulty claim

These past few days have left us all with a profound sense of humility in the face of nature’s destructive power. For years, we operated under the belief that we could continue consuming our planet’s natural resources, without consequence. We were wrong. – The Day After Tomorrow

All corporate pursuits should focus on emerging, evolving technology.

It’s the only way forward to a brave, safe, secure future.

Innovation and science are at the core of the sustainability track of Philip Morris International as the world’s leading tobacco company moves forward with its vision to create a smoke-free world.

“For PMI, sustainability means taking care of tobacco-farming communities; protecting the health, safety and wellbeing of our employees; investing in novel technologies; and reducing waste and carbon emissions, among others. These are key elements of sustainability and we take them very seriously. But we believe that the biggest contribution to society that we can make is to minimize the negative impact of cigarettes on health. This is the objective that sits at the top of all our sustainability priorities,” said Tommaso Di Giovanni, vice president for International Communications, PMI.

Di Giovanni was among the four top executives who spoke during a webinar, “Sustainability: The New Norm of Innovation & Sustainability”, organized by leading newspaper South China Morning Post on August 24.

The speakers shared their insights on how leading companies are future-proofing their organizations by constantly reinventing product portfolios and sustainable business practices during and after the Covid-19 pandemic.

“We know that combustion generates the vast majority of toxic compounds found in cigarettes. Twenty years ago, we didn’t have the technology, science and innovation needed to address that issue. Today, we do,” said Di Giovanni.

PMI has invested massively in high-quality talent and facilities to develop innovative smoke-free products that offer smokers a satisfying and better alternative to cigarettes.

“Since 2008, we’ve invested more than $7.2 billion into the science and research of developing smoke-free products, and we employ more than 400 world-class scientists, engineers and technicians to help us,” Di Giovanni said.

Among the smoke-free products developed by PMI and already available in many markets around the world is IQOS, an electronic device that heats tobacco-filled sticks wrapped in paper, called HEETS or HeatSticks, to generate a nicotine-containing aerosol.

IQOS heats specially designed tobacco units just enough to release a flavorful nicotine-containing tobacco vapor but without burning the tobacco.

Because the tobacco is not burned, the levels of harmful chemicals produced by IQOS is significantly lower compared to combustible cigarette smoke.

“Around 11 million adult smokers around the world have already stopped smoking and switched to IQOS. Our vision at PMI is that smoke-free products such as IQOS will one day replace cigarettes. But we cannot achieve this vision on our own; we need other stakeholders to play their part,” Di Giovanni said.

In July, the U.S. Food and Drug Administration authorized the marketing of IQOS as modified risk tobacco products, describing the authorization as “appropriate for the promotion of public health”.

”The US FDA’s historic decision, made after intense scrutiny of evidence submitted by PMI, marks the first time that the agency has granted MRTP marketing orders for an innovative electronic alternative to cigarettes,” explained Di Giovanni.

PMI’s transformation from a leading cigarette company to a company committed to delivering a smoke-free future entails a huge change, stressed Di Giovanni.

“We’re moving from a relatively simple product—cigarettes have been sold almost in the same shape and form for one 150 years—to an innovative product based on technology and deeply rooted in science. We’re moving from a company that is very stable and consistent to a company that needs to be agile.”

To his knowledge, Di Giovanni said, no other company has proactively and voluntarily gone through the transformation embarked upon by PMI.

“Our transformation is a disruption from the inside out, and we hope that it makes a positive impact on other companies and society as a whole.”

He said the Covid-19 pandemic strengthened their belief that PMI is going in the right direction.

“The pandemic highlighted the importance of health and health protection, science-based policy decisions, multi-stakeholder dialogue, and access to accurate information.”


Facts are sacred, incontrovertible, indivisible.

Juggle them anytime you can, break them down you can’t.

Thus, a privately run public utility can only be so desperate to resort to fact-switching to drastically alter the narrative about the current situation of the electricity distribution system in Iloilo City to accuse the current utility of incurring a high systems loss that the new company, More Electric and Power Corp., incurred when it started operating the city’s electricity distribution system last March.

Not wanting to appear so technically inept so as to make a false claim before the public on an issue that the Energy Regulatory Commission itself can declare as a lie, Panay Electric Cooperative asked its allies in the Koalisyon Bantay Kuryente led by Jose Allen Aquino to use the wrong system of computing the systems loss, or the amount of electricity lost due to dissipation from old distribution equipment or wires or stolen from pilferage, claims MORE Power.

The Iloilo City’s distribution utility insists the system loss presented by KBK was based on the wrong formula and selective reference to ERC resolutions.

For instance, Aquino claimed that the percentage of system loss can be culled using the system-loss charge in the monthly bill of customers. To arrive at his overstated systems loss rate of 7.17 percent that MORE Power allegedly incurred in a month, Aquino used the number in the systems-loss charge and divided it against the generation charge.

In reality the systems-loss charge is proportional to both the generation and transmission charge, and not just on generation charge alone as shown in Aquino’s formula.

This proportionality, according to systems engineers, is called the Gross-up Factor, or U, as it takes into account the sub-transmission plus the substation loss, the capped feeder loss, and the actual system loss for the past 12-months.

Aquino and his PECO puppet masters, in using the same formula, then PECO’s last systems loss for the month February 2020 would have reached 8.13 percent, a rate much higher than the 7.17 percent that Aquino presented as MORE Power’s systems loss.

Using the formula of the ERC and based on the agency’s formal issuances, the system-loss cap should be applied only to the distribution feeder loss. In fact, MORE Power is applying the feeder loss cap of six percent for 2020, based on Section 2.3.1 of the ERC Resolution 20, Series of 2017.

This seems to be a technical issue that most people would understand only with simple false claims by rabble rousers with oligarch masters like what happened in Iloilo City when PECO’s owners, the Cacho clan, partnered with another Ilonggo oligarch company, the Lopezes, to put up Panay Power Corp. during the years of power-supply crisis created by the incompetence of President Cory Aquino’s energy managers and supply the city’s electricity requirements with the highest power rate ever charged by a utility.

As the company with the monopoly in power distribution, PECO charged what PPC charged it for electricity produced by PPC’s coal-fired power plant which started operating in 1996.

Note that in exchange for securing its own market, the Lopezes gave the Cachos a 30-perent stake in PPC with the Lopezes taking 30-percent stake in PECO.

This “incestuous” relationship is one of the anomalous corporate practice that Congress corrected with its passage of the Electric Power Industry Reform Act in 2001 when it banned cross-ownership of power generation companies and distribution utilities.

Recognizing the potential abuse of this kind of relationship, the ERC acted on a petition filed by an Ilonggo group to investigate the overcharging by PECO of the generation charge paid to the Lopezes’ PPC. It found the allegation of overcharging valid, and ordered PECO in 2005 to refund P630 million to Ilonggo consumers.

The record of abusing its power over consumers by virtue of its monopoly in the distribution system shows why PECO did not get back its congressional franchise in 2019 and Congress gave this instead to MORE Power.

Its lackeys continue its record of lies by insisting the power outages that occur every time MORE Power conducts preventive maintenance of the old distribution lines and sub-stations was due to the new utility’s incompetence is galling had consumers and the government not know that PECO did not spend the money it was supposed to — to improve the quality of the distribution service.

The Iloilo Economic Development Foundation said one of the systems that PECO should have invested in was a P500-million state-of-the-art switching system that would cut power outages.

Instead, MORE Power is not pressured to cut off supply in one area of Iloilo City when it conducts repairs on the city’s overheating distribution lines or equipment because it kept its 1950s switching system in place.

In its online narrative, PECO made a correct claim when it installed the region’s most modern switching system in the 1950s under the guidance of its late patriarch Jose Luis Cacho.

Yes, indeed, but it was also the last time PECO put any capital equipment in Iloilo City in place.

Behold God’s glory and seek His mercy.

Pause and pray, people.