|
Yesterday, I was absolutely flustered by the news that
House Energy committee chairman Rep. Juan Miguel (Mikey)
Arroyo had announced his committee would stop pushing
for amendments to the highly controversial Electric
Power Industry Reform Act (Epira).
That
really ruined my morning. I had thought the future was
rosier for Manila Electric Co.’s (Meralco) battered
customers.
Arroyo
was even quoted as saying he would formally invite his
counterpart in the Senate, Sen. Miriam Defensor
Santiago, to do the same—that is, abort the initiative
to amend. Instead of amending the Epira, let there be a
unified move to resolve “remaining issues” in the power
sector through the Joint Congressional Power Committee.
Now, why
is it possible that Miriam would join Mikey in this
questionable scheme? Well, she’s angling to be named to
that international judiciary body, and that could be an
important consideration in positioning herself on this
issue. But of course, I could be dead wrong. There’s no
telling what this feisty lady is capable of.
But
Mikey’s turnaround is a sad, sad development. What a big
letdown, how simply crushing, for the millions of
households that have had to suffer Meralco’s
extortionate power rates.
Pete
Ilagan, president of the consumer watchdog group called
Nasecore, said, “The consuming public feels utterly
betrayed.”
It was
bad enough, he said, that the consuming public’s
interest had been consistently betrayed by the
“pro-Meralco” Energy Regulatory Commission under the
chairmanship of Rodolfo Albano.
“Now, we
have no less than the son of the President suddenly
abandoning this just cause on behalf of millions of
electricity consumers, whose hopes he had raised by
taking an adversarial position versus Meralco at the
outset.”
From out
of the blue, he said, President Arroyo’s vow counts for
nothing, her vow to see to the lowering of Meralco power
rates as part of her legacy to the people when she steps
down in 2010.
“Is
something going on here?” Ilagan asked rhetorically.
For my
part, I wonder what Rep. Luis Villafuerte, Mikee’s
cochairman in the House energy body, has to say. I also
wonder what Winston Garcia, president-general manager of
the Government Service Insurance System, thinks of
Mikey’s shocking somersault. And I wonder how President
Arroyo herself is taking this.
Both
Villafuerte and Garcia have boldly stuck their necks out
to put an end to the Lopez family’s control on Meralco,
which is based on a flimsy equity share of 33.4 percent.
And now,
this. What do you, dear reader, think? Isn’t this turn
of events awfully hilarious?
In one
of my previous columns, I predicted the Lopez family
would fight tooth and nail and spare no expense to
perpetuate their hold on Meralco by using their
political might and influence to resist any amendments
to the Epira.
Meralco
is the very lynchpin of the Lopez financial empire.
Without it, the whole Lopez conglomerate could collapse.
But I never thought the Lopez family could be so clever
to make Mikey Arroyo reverse his amend-the-Epira tack.
How naïve of me!
For more
than four decades, Meralco has been serving as that
family’s prized cash cow. Without Meralco’s constant and
ever-ready liquid nourishment, that family’s other
business ventures couldn’t possibly have prospered as
spectacularly as they have. Today, the whole world knows
the Lopez family is the 10th-richest in the country.
This
unique Lopez business formula with Meralco as the
fountainhead is discussed in detail in Alfred McCoy’s
book An Anarchy of Families (published by the Ateneo de
Manila University Press). In this book, McCoy has this
to say about the late Lopez patriarch, Eugenio H. Lopez:
“Investing just enough capital to gain corporate
control, he would then drain the company’s assets
through a percentage-basis management contract or lavish
executive benefits, practices that often aroused charges
of profiteering from minority stockholders.”
While
McCoy referred to the pre-martial law financial buildup
of the Lopezes, what we are seeing today in the
Lopez-controlled Meralco is simply that nothing has
changed much. A peek into the past merely shows us that
the issues being raised against the Lopezes today are
the very same ones that have been festering for more
than four decades of Meralco’s corporate existence.
The
Lopezes have only 33.4 percent versus the government’s
35.7 percent, yet look who’s in control. In the last
annual stockholders’ meeting, the Lopezes managed to
stay in the driver’s seat through questionable proxy
votes in defiance of a cease-and-desist order issued by
the Securities and Exchange Commission. The question
still hangs in the balance at the Court of Appeals.
But we
digress. As I said, control of Meralco is a crucial
element in the Lopezes’ expansionist business agenda,
especially in the lucrative power-generation side of the
industry. They don’t want Congress to tinker with the
Epira because in its present form, it is perfect. Why
fix it if it ain’t broke (?)—as far as they are
concerned, that is.
It was
precisely through the deliberately punched loopholes in
the Epira (and the enabling implementing rules) that the
Lopezes were able to make a mockery of the Epira’s
intention to discourage cross-ownership and foster
competition in the industry.
Thanks
to this law (and its rigged rules), the Lopez family
today controls not only the biggest
electricity-distribution utility in the country, it also
owns the generation companies from which Meralco draws
up to 55 percent of the expensive juice it makes its
customers pay.
Put
another way, if Congress insists on rewriting the Epira,
it could mean a radical diminution, if not the collapse,
of the Lopez empire.
For
example, a simple amendment alone that would explicitly
outlaw cross-ownership in the distribution and
generation sides of the industry would have a
devastating effect on First Philippine Holdings, the
Lopez flagship company.
And so,
when Mikey Arroyo tells the nation that amendments are
no longer necessary, we can’t help but ask, what the
hell is going on?
This is
what essentially he was quoted as saying: “The proposed
revisions to the Epira were rendered moot and academic
after industry players already agreed to accelerate
implementation of open access, or the regime when
electricity end-users can finally choose their power
suppliers, specifically for those of 1 megawatt [MW] and
up. . . . We believe that the proposed amendments. . .
[have] been overtaken by events…the policy to operate
open access has already been agreed upon by the
industry.”
Very
clearly, the chairman of the House committee on energy
would have us believe that the proposed amendments are
all about open access; that therefore, the need to amend
is no longer there.
But open
access would benefit only the commercial and industrial
users (or those using 1 MW or more). What about the
devoutly hoped-for relief from extortionate rates being
imposed on Meralco’s 4.2 million households? That kind
of relief is possible only if you amend different
provisions of this defective law.
If no
political leader of note emerges to put Mike Arroyo in
perspective, I guess the Lopezes will have their way,
after all.
Kaawa-awa naman tayo.
Omerta_bdc@yahoo.com |
