IF he’s really serious, President Duterte can always ask his friend, former Sen. Juan Ponce Enrile, to help prosecute grafters and plunderers in the multitrillion-peso power industry.
Now 93 years old but still sharp and healthy, Enrile was the only one who voted against the passage in Congress of the controversial Electric Power Industry Reform Act (Epira) before President Gloria Macapagal-Arroyo signed the measure into law (Republic Act 9136) in 2001.
Apart from boasting that the electric-power rates would immediately go down, she offered several other reasons to convince Congress to pass the Epira. Among them was that the passage of the law was necessary for the World Bank and the Asian Development Bank to release a loan of $950 million to the country and that the enactment of the Epira would mean cheaper electricity.
What happened? Instead of going down, rates went up, triggering a public outcry.
“I knew that the Epira would not benefit the people. I went against it because I realized that it would legalize and justify the imposition of unwarranted financial burden on the people under the so-called purchased power adjustment, or ‘universal levy’, as the Epira would later call it,” Enrile said.
Indeed, he wrote Arroyo on March 7, 2001, to warn her about the harmful provisions of the Epira, calling her attention to the market control and monopoly of Manila Electric Co. (Meralco) over a huge portion of the power industry, especially the exploitation of Meralco electric consumers.
“I pointed out to her the injurious effect of giving Meralco and other distribution companies the same right given to the NPC [National Power Corp.] to charge electric consumers for stranded losses on bilateral contracts with independent power producers [IPPs],” Enrile recalled.
“I especially warned her regarding the danger to the electric consumers posed by stockholders, like the Lopezes and their associates, who have interest both in the generation and distribution side of the power industry,” he said.
His letter was received by the Office of President Arroyo at Malacañan Palace on March 8, 2001. He does not know whether Arroyo ever saw his letter. But one thing is sure: he never had the courtesy of a reply. True enough, shortly after the passage of Epira, Arroyo’s boast to lower the cost of electricity in the country did not happen. Instead, the electric bills of consumers skyrocketed, to the public’s dismay and shock.
To placate the enraged public, she announced in a news conference and in a boastful display of make-believe concern for the people that she was “squeezing blood out of stone” to reduce the power purchase agreement (PPA).
She ordered the NPC to reduce its PPA from P1.25 to P0.40. This drove the NPC deeper into bankruptcy. This, as Enrile learned from a report of the American Chamber of Commerce, was a very expensive publicity stunt to be paid for with taxpayers’ money. “It turned out that the government had to borrow $500 million to cover the NPC-PPA reduction that President Arroyo ordered,” Enrile said.
“However, for reasons only she would know, she refused to touch Meralco’s PPA from its own independent power producers. To make matters worse, Meralco arrogantly refused to honor its 10-year 3,600 megawatts power-supply contract with the NPC. This was to allow Meralco to use the power output of its own independent power producers whose prices range from P5.74 to P6.26 to P7.39 per kilowatt-hour, compared with the NPC’s price of P3.62 per kWh,” Enrile pointed out.
Meralco’s mega-franchise
The House of Representatives and the Senate have approved, with unbelievable dispatch, the grant of a mega-franchise to Meralco. That mega-franchise covers an area of 9,337 square kilometers or 3,647.3 square miles, where a quarter of the country’s power consumers live in 22 cities and 89 municipalities. The original area of Meralco, before the Lopezes sold and transferred it to the Meralco Foundation in the 1970s, was 1,018 square miles, embracing seven cities and 40 municipalities.
Enrile said: “The mega-franchise bill breezed through Congress despite Meralco’s dismal record as a public-service utility and glaring evidence of its abuses, excessive PPA charges, its sweetheart deals with its own IPPs, and shenanigans in its Return on Rate Base [RORB].”
“We all know, of course, that no less than the Supreme Court has ruled with finality that Meralco has been illegally passing on its own income taxes to its hapless customers. Yet even now, Meralco says it will go bankrupt if it refunds the billions of pesos it has exacted from the public,” Enrile said.
That Meralco is in dire financial straits as it claims, while its affiliate IPPs, like First Gas, end up among the country’s most profitable corporation is a classic demonstration of the evils of cross-ownership, which the Epira promised but failed to curb.
“Undoubtedly,” said the former lawmaker, “the PPA or universal levy, or whatever name they now call it, is anti-people. It makes the people pay for electricity they have not used. It makes the cost of electricity exorbitant. It makes the country uncompetitive in the world market. It deprives the poor and the jobless of an opportunity to find employment because the high cost of electric power will mean fewer investments and, therefore, fewer jobs.
“It also means an unjust enrichment of persons who are already immensely rich, at the expense of the people. For the truth is the people themselves are the ones paying for the power plants and electric distribution facilities being used to provide electricity to them. And yet, they will never own these power plants and facilities. These will remain the property of powerful, influential and smart businessmen who managed to wangle legislative franchises from Congress and power-supply contracts from the NPC and Meralco.”
To reach the writer, e-mail cecilio.arillo@gmail.com.