We financed First Gas

Of all the power-rate-padding accusations hurled against the Lopez-controlled Manila Electric Co. (Meralco), the one hurled by Camarines Sur Rep. Luis Villafuerte in his speech last week is the most serious so far.

In a scathing privileged speech, Villafuerte gave a detailed and fully documented account of “ghost deliveries” of electricity from a Lopez-owned generation company called First Gas Power, which, he said, couldn’t have produced any electricity simply because it was not yet operational at the time we were being billed.

Villafuerte recounted how Meralco collected a total of P12.9 billion, or an average of P1.08 billion a month, from its customers by simply padding its purchased power adjustment (PPA) charges.

Behind Villafuerte’s exposé on these fraudulent charges is the story of how the Lopez Group was able to get back in less than a year the P8 billion it invested in the 1,000-megawatt First Gas Santa Rita power-plant project.

It is, sadly, the fully documented story of how Meralco under the Lopezes betrayed the public trust.

To put this tale of brigandage in perspective, let me point out that in the period that Meralco customers were being charged for power it wasn’t actually getting, Filipino power consumers all over the country were being compelled to pay the controversial PPA charges, which seemed to be neither fish nor fowl to perplexed consumers. It was a time of confusion, and it was then when Meralco saw its golden chance to pull a fast one on the public.

Meralco’s average PPA in 2000 was P1.676 per kilowatt-hour (kWh) (49.6 percent). In 2001 it was P2.425 or 68.1 percent. These were added to the consumers’ electric bill in addition to the National Power Corp.’s (Napocor) charges of P3.378 per kWh in 2000 and P3.558 per kWh in 2001.

We, Meralco consumers, were made to believe that the PPA charges were mostly a result of the onerous build-operate-transfer contracts signed by the Napocor with independent power producers during President Ramos’s administration. They were the guaranteed take-or-pay-the-power-we-produce provisions to which the Napocor under FVR agreed, just to be able to end the half-day brownouts that were then plaguing most of the country. We grumbled, cursed, ranted and raved, but in the end paid pay the Meralco man, anyway.

What we did not know at the time was that the Lopezes, who controlled Meralco, were the ones who also owned the First Gas generation company. What we did not know was that Meralco and First Gas had their own PPA scheme, albeit with certain creative modifications, going on a grand scale.

Actually, I had written about these ghost deliveries from First Gas to Meralco in one of my columns last year. But it is only now that the whole story, with all its salacious details and damaging documentation, has surfaced for the public’s consumption.

By letting the proverbial cat out of the bag, Representative Villafuerte has effectively started laying the basis for possible criminal charges that may be filed by consumers against the Lopezes on this issue. Surely, this is not simply a case of overcharging. We have been made to pay a hefty sum for electricity that was not delivered. Isn’t this a form of stealing? Let the lawyers come up with the appropriate legal term.

In the final analysis, what this epic larceny boils down to is that we consumers are the rightful owners of the First Gas Santa Rita power plant, not the Lopezes. Consider the following facts and figures from this company’s annual audited reports:

In its December 31, 2002, financial report, it declared revenues amounting to P19.038 billion for 2002.

Net income after tax—P4.665 billion.

Declared cash dividend of P5.3 billion.

Total cash dividends paid by FGPC for 2001 and 2002, therefore, was P11.448 billion, representing 94.3 percent of First Gas’s total net income after tax for the first 30 months of operation from July 2000 to December 31, 2002, of P12.14 billion (P2.572 billion in 2000, P4.904 billion in 2001 and P4.665 billion in 2002).

Considering that the Lopez Group invested only P8.071 billion (paid-up) in First Gas, it means that after barely two years and six months of existence, the Lopez Group was able to make a whopping net profit of P11.448 billion.

Now, if that is not the corporate miracle for all time in the Asian region, get a load of this: The astronomic profits were made even if the 1,000-MW plant was not yet operational and actually did not deliver any power to Meralco from December 2000 to November 2001. But Meralco actually paid the Lopez-owned First Gas P13 billion in full-capacity fees.

Since we were duped into paying a total of P12.99 billion to Meralco for power that we never used, we may have a right to stake a proprietary claim over First Gas. After all, it was our money that made its miraculous growth possible. 

Omerta_bdc@yahoo.com

ONE hopes that Press Secretary Ignacio Bunye was quite accurate in saying “that’s all folks” as far as the Cabinet shuffle is concerned.

Higher food and fuel prices. A volatile and uncertain peso. Preparedness for potential natural disasters. Shrinking personal buying power.

Food-price inflation is dominating media headlines across Asia. Last year alone wheat prices rose nearly 100 percent, and rice prices 45 percent. In the United States the supermarket giant Wal-Mart is rationing rice in an effort to prevent customer hoarding. Some countries have experienced protests over rising food prices.

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Omerta: We financed First Gas

Of all the power-rate-padding accusations hurled against the Lopez-controlled Manila Electric Co. (Meralco), the one hurled by Camarines Sur Rep. Luis Villafuerte in his speech last week is the most serious so far.

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