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THE
Manila Electric Co. (Meralco) is in for yet another
controversy after a proadministration legislator
revealed an alleged shady transaction between Meralco
with another Lopez-owned company, with consumers again
taking the burden.
In a
privileged speech, Kabalikat ng Malayang Pilipino Rep.
Luis Villafuerte of Camarines Sur said ghost deliveries
between the Lopez-owned First Gas and Meralco resulted
in blatant overcharging of consumers.
“On such
a grand scale that should stagger the minds of
consumers, electricity [was] delivered by Meralco at a
price that included costs of power that Meralco paid to
First Gas when the latter did not deliver the power that
Meralco paid for, but the cost of which Meralco passed
on to consumers,” Villafuerte said.
Villafuerte traced First Gas’s origins: incorporated on
November 24, 1994, First Gas entered into an EPC
contract with Siemens Consortium for the turnkey
construction of a 1,000- megawatt plant for $479
million. He added that as of December 31, 2000, First
Gas had a paid-up capital of P8.07 billion.
Full
completion and commercial operation of the 1,000
megawatt (MW) plant to be contracted by Siemens for
First Gas was delayed, such that the First Gas Santa
Rita plant only delivered to Meralco an average of 138
million kilowatt-hours (kWh) a month from July to
November 2000, said Villafuerte.
“This is
the equivalent of only 212.9 mW in capacity, or an
equivalent output of less than 300mW.
“Notwithstanding the fact that First Gas had only a
demonstrated capacity for the period from July to
November 2000 rounded to about 300 mW, Meralco willingly
paid First Gas the capacity fees and fixed fees
equivalent to 1,000 mW,” Villafuerte added.
He said
that from December 2000 to November 2001, Meralco paid
First Gas P12.99 billion or an average of P1.08 billion,
a month, even if First Gas did not deliver to Meralco
the equivalent kilowatt-hour power that Meralco paid
for.
“Meralco
charged these P12.99-billion payments for undelivered
power to Meralco consumers as part of PPA [power
purchase adjustment] for said period, from December 2000
to November 2001,” Villafuerte said.
“Even as
Meralco paid First Gas for undelivered power, Meralco
had to buy from the National Power Corp. supposedly the
difference that First Gas did not deliver but got paid
for and yet, Meralco’s own records show that its
purchases of power from Napocor during the 12-month
period only increased an average of less than 300 mW. In
terms of energy, it was only
162.26-million-kWh-per-month average,” he added.
“What
was the result? From July to December 2000, First Gas
had a net-income after tax of P2.572 billion, while for
the year 2001, First Gas had a P4.904-billion net-income
after tax, or a total of P7.476 billion. Of the total
P7.476-billion net income for the 18-month period, First
Gas declared P6.143 cash dividends.”
Villafuerte said that for 2002, First Gas obtained a
net-income after tax of P4.665 billion.
“Hence,
the net income after tax of First Gas for the first 30
months of operation from July 2000 to December 31, 2002,
was P12.14 billion. In 2002 First Gas again declared a
cash dividend of P5.30 billion,” Villafuerte said.
Considering that First Gas invested only P8.07 billion,
this means that after 30 months of operations, it got
back in cash dividends P11.448 billion, the solon noted.
“The
Lopez Group as stockholders of First Gas did not only
obtain a return of 100 percent of its original paid-up
capital, but an extra of P3.372 billion to boot,” he
noted.
But the
worst side of these “highly scandalous transactions,”
Villafuerte said, is that what Meralco paid for in ghost
deliveries of First Gas that were passed on to Meralco
consumers.
“This is
one of the evils of cross-ownership between a public
utility power distributor and a power generator, a
compelling reason why the Epira [Electric Power Industry
Reform Act of 2001] should be amended to restrict and
regulate cross-ownership between power generators such
as First Gas and power distributors such as Meralco,”
Villafuerte said.
In the
same speech, Villafuerte also scored the settlement
agreement forged between Meralco and Napocor 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. 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.
Villafuerte assailed the Energy Regulatory Commission
for not outrightly rejecting the petition, considering
that it is inimical to public interest.
“Again
what is stultifying about this messy deal is that once
again, electric consumers of Meralco are being proposed
to assume, through billing charges, the obligation of
Meralco to Napocor,” Villafuerte said.
Irate
customers can file a class suit against the Manila
Electric Co. following the latter’s admission
that the former have been made to shoulder its systems
losses, among others, according to Chief Presidential
Counsel Sergio Apostol.
Asked to
comment on Meralco’s admission before the joint
congressional inquiry on allegations of overcharging
against the public-utility company, Apostol said:
“Somebody has to file a case against Meralco. This is
allowed by law.” He noted that Meralco has “already lost
in two cases before the Supreme Court.”
Deputy
Presidential Spokesman Lorelei Fajardo said in a
statement that “Meralco may have to seriously consider
its position on the matter,” referring to the P500
million that consumers were made to pay in terms of
Meralco’s systems losses and its own electricity bills.
Fajardo added that this is “now a matter for the
legislators to seriously consider in their consideration
to amend the Epira.”
Commenting on Meralco’s full-page advertisements
published in major newspapers, the spokesman of the
Government Service Insurance System assailed Meralco for
claiming that GSIS president Winston Garcia had stood as
legal counsel for Visayan Electric Co. The Veco is
Meralco’s counterpart in Cebu whose rates, the GSIS
chief executive had exposed, are lower than those
charged by the Lopez family-owned electric company.
“Winston
Garcia is not and was never a lawyer of Veco. Neither
was he ever connected with the Garcia law office
allegedly lawyering for Veco,” Elamparo said in a press
statement.
“The
Garcia law office belongs to the other Garcias of Cebu—the
family of lawyer Sonny Garcia, and GSIS president Garcia
had nothing to do with it,” she added.
The
National Labor Union (NLU) at the same time accused
Meralco of taking away from the table of poor Filipinos
the equivalent of some 31.5 million kilos of government
rice each year.
“This is
corporate greed at its worst because Meralco fattens
itself by snatching food away from the mouth of the poor
and the malnourished, especially children and the
elderly,” said the NLU through its president Dave Diwa. |
