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SENATE
Minority Leader Aquilino “Nene” Pimentel Jr. proposed on
Tuesday that the coming congressional inquiry into
soaring power rates should include a review of what
Congress can do to effect reforms in the National Power
Corp (Napocor).
Pimentel
pointed out that “the Napocor holds the key to the
government’s plea to bring down exorbitant electricity
costs being borne by consumers.”
In an
interview, Pimentel told reporters that the Electric
Power Industry Reform Act (Epira) already mandates the
Napocor to take steps to lower electricity rates. “They
should try that first [then] it is up to Napocor
[officials] to tell us if they can do it or not.”
This
developed as Sen. Miriam Santiago, Senate energy
committee chairman, invited her House counterpart, Lakas
Rep. Mikey Arroyo of Pampanga, to conduct a joint
hearing on the expensive power rates late this week.
She told
reporters that related issues on why electricity rates
are high and who is to blame for this would be addressed
at the joint hearing of the Senate-House energy
committees she has tentatively set for Friday.
At the
same time, Sen. Francis Escudero, suggesting steps to
immediately lower expensive electricity rates charged to
consumers, asked the government to scrap the imposition
of value-added tax (VAT) on systems loss incurred by
power distribution firms, which he described as a “tax
on theft.”
Escudero
explained that one of the primary reasons for the
country’s skyrocketing power cost is the VAT on systems
loss, adding that there is no provision in the VAT law
that this should be imposed.
At the
same time, the United Opposition (UNO) warned that the
Malacañang-backed government takeover of Meralco would
only “result in inefficiency and corruption and serve as
a convenient milking cow for Palace cronies.”
“The
government taking over Meralco is a terrible idea that
will only lead to inefficiency and corruption.
Philippine history will show that companies which were
controlled or sequestered by the government floundered
and lost their competitiveness” UNO spokesman Adel
Tamano said.
In a
statement issued on Tuesday, Tamano explained that
“essentially, these companies became milking cows for
government officials who were placed in prime positions
in these corporations in order to receive fat salaries
and perks.”
The
opposition insisted that the Napocor was responsible for
much of the unbridled increase in power rates.
Earlier,
Makati Mayor Jejomar Binay, UNO president, and Pimentel
voiced concern over the apparent “squeeze play” being
applied against the Lopez family and Meralco as another
ploy by Malacañang to blame the private sector for her
administration’s obvious failure to implement the
necessary reforms in the power sector and keep the cost
of electricity down.
Echoing
Escudero’s call for the scrapping of the 12-percent
expanded VAT on systems loss, militant legislators urged
the government to remove the E-VAT and royalties levied
on power, electricity, natural gas, oil and oil
products.
At the
same time party-list Reps. Teodoro Casiño and Satur
Ocampo of Bayan Muna; Crispin Beltran of Anakpawis; and
Liza Maza and Luzviminda Ilagan of Gabriela said the
government must reimpose stringent price controls on
electricity and oil prices.
The
legislators also urged President Arroyo and Meralco to
jointly provide relief to power consumers by
substantially lowering electricity rates immediately,
“considering the fact that both parties have profited
too much from the consuming public.”
“It is
the height of greed and insensitivity for state-owned
National Power Corp. and Meralco to be swimming in
profits, while majority of our people suffer from
unconscionably high power rates,” the legislators said
in a joint statement.
They
said that Napocor is No. 1 in the Top 1000 corporations
in the Philippines in 2005 and 2006. The power company
posted a net income of P90 billion for 2006, up from P86
billion in 2005. Napocor still has 15 independent power
producer plants, the largest of which are the
1,200-megawatt (MW) Ilijan natural gas-fired power
plant, the 700-MW Pagbilao coal-fired power plant, the
1,000-MW Sual coal-fired power plant and the 345-MW San
Roque hydroelectric power plant.
No. 3 on
the list is Meralco, which has posted a 23-percent
increase and raked in net profits of P655 million in the
first quarter of 2008. In 2006 the country’s largest
distribution utility raked in P13.37 billion in net
revenues.
“Both
Napocor and Meralco callously continue raking in profits
from millions of consumers in these times of crisis.
Since April, electricity rates have gone up to more than
50 percent after Meralco imposed adjustments on its
generation, distribution, system loss and transmission
charges. The overall increase in the billings averaged
P0.97 per kilowatt-hour (kWh) increase. The company
hiked its generation charges by P0.51 per kWh and its
distribution charges by P0.30 per kWh,” they said.
While
legislators are ganging up on Napocor and Meralco,
President Arroyo is “seriously” considering a general
review of the contracts with independent power producers
(IPPs) as part of her strategy to seek lower power
rates, her economic adviser said on Tuesday.
Albay
Gov. Joey Salceda, the President’s economic adviser,
said he recommended a “general review of IPPs” to the
Chief Executive while discussing the Meralco issue with
Arroyo.
Salceda
said the President responded positively when he
suggested a “general contract review” of the IPPs, which
he believed would serve the public interest better as it
would involve all power producers, not just Meralco.
“She
said she will study it seriously. It will go through the
process. Under the Epira, the justice department, the
energy department and Napocor can conduct a review on
IPPs,” Salceda said.
He said
that this way, it would not appear that the government
is just targetting Meralco, which Palace officials led
by Arroyo herself, have denied.
Deputy
Presidential Spokesman Lorelei Fajardo noted that
Winston Garcia, president and general manager of the
Government Service Insurance System (GSIS), “has made it
clear that the government does not intend to take over
the operation of Meralco.”
“The
GSIS simply wants to review, and look into the records
of the company as a member of its board. The Lopezes
have nothing to fear but fear itself. Come out with the
records and satisfy their shareholders. After all, they
invested their money and, especially in the case of GSIS,
they invested the hard-earned money of government
employees,” she said.
Fajardo
added “as one of the major shareholders of Meralco, it
is within the rights of GSIS through its chairman to
cause Meralco to allow its board members to have access
to records to allow it to determine the viability of
their investment, or if they are in fact receiving just
and fair share of the profits derived from the utility
company.”
Garcia
is seeking the full disclosure of Meralco’s audited
financial statements to check whether it has been
charging its customers fairly. (With M. Gonzalez, C.
Mocon and E. Dimaculangan) |
