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ASSERTING that the congressional oversight panel on
power has heard allegations of malpractices by both the
key contending stakeholders in the sector, a senior
member of the committee said Tuesday the ongoing inquiry
on high power rates would most likely yield a
recommendation to overhaul the Energy Regulatory
Commission (ERC) as part of the solution.
“So, the
problem, really, is the ERC. Which means that [with] any
wrongdoing, the one who is being accused will say it was
okayed by the ERC. So, it seems to validate the act. ERC
is the policeman of the power sector, they’re the
traffic manager there, they’re everything. So if you
have a corrupt ERC, nothing will happen,” said Sen.
Joker Arroyo.
He
suggested that the solution probably lies in Congress
crafting a new law to reorganize the ERC into “something
like the Monetary Board. You give them high salaries,
good pay, so that they don’t make money on the side.
That is what I have in mind. Let us make it an
independent ERC. Otherwise, we’ll be seeing the same
thing happen; there will be a sweetheart deal, and the
parties will just say, ‘oh, it was approved by the ERC.”’
He was
apparently referring to the settlement agreement forged
between the contending parties that have been blaming
each other for the high electricity rates—the state’s
National Power Corp. (Napocor) and distribution utility
Manila Electric Co. (Meralco)—to simply pass on to the
public more than P50 billion in debts owed each other.
The Napocor claims Meralco owed it money for all the
time it did not buy power generated by Napocor despite
an agreement. The Meralco had been accused of buying
from its own independent power producers (IPPs) even at
peak rates, in what critics describe as a brazen
self-dealing benefiting only the common owners of
Meralco and the IPPs.
Meralco
officials dispute the allegations at Monday’s marathon
hearing at the Senate of the Joint Congressional Power
Commission. At the end of that hearing, one of the two
chairmen of the JCPC, Sen. Miriam Santiago, directed the
ERC officials to scuttle the P52-billion agreement
between Napocor and Meralco, for being contrary to
public interest.
At any
rate, Senator Arroyo thinks the core issues of why
electric rates are high will be resolved only after the
crucial May 27 Meralco stockholders’ meeting.
He
characterized the meeting as a “winner-take-all” battle
between the bloc led by Government Service Insurance
System president Winston Garcia and the Lopez family for
control of the profitable distribution utility amid
grumblings by Meralco franchise consumers over
skyrocketing electric bills.
While
the Lopez family owns at least 33.4 percent of Meralco,
Garcia’s GSIS controls 33 percent but it is seeking to
convince other independent shareholders holding the
balance of 33.6-percent shares—which include other
government financing firms—to take its side at the
upcoming boardroom brawl.
But
Senator Arroyo doubts Garcia’s assurance that he does
not want to take over Meralco. “That’s what Winston, the
president of GSIS says; that he doesn’t intend to take
over. But then I am wondering, if that is the case, then
what is the exercise for? If he wants more proxy, he
wants more shares.”
He said
what the JCPC is “doing at the moment would not really
matter very much until we know who will win in the May
27 stockholders meeting in Meralco. Why? Because when we
know who’s the winner, whether it is GSIS or the Lopez
group, then that is like a new administration, just like
the government. So, the new government will now run the
show and no matter what we do now, when the new
government takes over, like whoever wins in the Meralco,
will naturally revamp the whole thing. So this is just
like the government, like an election. So whoever wins,
is a winner-take-all. So all these talks about
negotiations and all that, I don’t exactly buy that.”
The
senator likened the Meralco boardroom battle to a
high-stakes political contest. “It is like a game when
rival candidates for public office promise that when
they get elected they will do this and that…here you
have now two sets of candidates – the Lopezes saying if
you retain us, we will be able to achieve all of these
and the GSIS says we will change and revamp and we’ll be
able to achieve that. So to me, its May 27, that’s the
crucial point, all others are secondary.”
He noted
that the PowerCom members heard the charges and
countercharges between Garcia and the Lopez managers on
how Meralco is being run, but they have yet to ascertain
whom to believe. “There were allegations about
mismanagement. The problem with this whole thing is
that, for instance, there were allegations of
wrongdoing, but the defense is that these were approved
by the ERC.”
Meanwhile, if Garcia’s insistence that GSIS does not
really want to control Meralco is true, then, asked
Arroyo, “what’s the fight all about?”
He said
the net effect of the fight to have more shares and to
have more voting rights is that eventually whoever has
more shares has control of Meralco. “I am not saying
that it’s not good or it is bad, but ultimately, that’s
the objective.”
According to Senator Arroyo, all talk of lowering power
rates of the Lopez-controlled distribution utility would
be “useless” until the results of the May 27
stockholders’ meeting are known.
Whoever
emerges winner in the boardroom battle, he added, would
then have the task of bringing down power rates in the
Meralco franchise area.
While he
would not speculate on how the GSIS-led bloc challenging
the Lopezes in Meralco would proceed to lower the rates,
Arroyo recalled that Garcia himself told members of the
JCPC that his group “can earn more and we can increase
the price of the Meralco shares and at the same time
lower the rates.” This means, said the senator, that the
twin objectives of lowering rates and making Meralco
profitable—by good management—are attainable. |
