“(T)he franchisee is allowed to charge one percent of its total sales as its own consumption. The ERC allows this. Thus, Meralco was just following the rules of the ERC.”
by Ducky Paredes
Thanks to Winston Garcia and Senator Juan Ponce Enrile, the cat is out of the bag and what a large, rotten cat it has turned out to be.
Senator Enrile almost missed his chance. The Chair of the joint legislative inquiry into our largest power provider was talking of adjourning when Enrile insisted that he had something important to take up.
Enrile first asked Meralco President Jesus Francisco just how much power Meralco itself uses. When he was told that this was in the vicinity of 72 million kilowatt-hours a year, Enrile asked whether this was being billed to us, Meralco’s customers, under the systems loss item on our billings.
The Meralco president seemed stumped by this question or maybe he just did not want to be the one to be the one who dropped the ball. He asked a subordinate to answer for Meralco. No, the man told, Enrile, this was not part of “systems loss” but Meralco’s own consumption was also being billed customers under another item in their monthly bills at the rate of P5.70 per kWh.
The next day, Ted Failon and Korina Sanchez on DZMM, the radio station owned by the Lopez family (that also controls Meralco) were interviewing a man from the Energy Regulatory Commission (ERC) and elicited from him the fact that the practice allowed in all power franchises by the ERC is that the franchisee is allowed to charge one percent of its total sales as its own consumption. The ERC allows this. Thus, Meralco was just following the rules of the ERC.
Thus, as it turns out, Francisco did not answer Enrile’s question. 72 million kWh is not what Meralco uses; it is what Meralco bills us. For all we know the 73 kWh (since it is allowed by the ERC) is much, much more than what Meralco would use for all of its offices.
One ought to ask the ERC: Shouldn’t the country’s largest power franchise have less of an allocated percentage for its own use than smaller power franchises. One would expect there to be greater economies of scale for a franchise with a million subscribers than another franchise with only 10,000 subscribers.
Since Meralco is allowed to charge us so much more kilowatt-hours than it uses, could it be that Meralco officials actually get their power free? If they do that for their officers, how about the companies of the Lopez Family? Do we also pay for their power usage?
We are also reminded of the 2003 Supreme Court order for Meralco to refund its customers P30 billion in income taxes it passed on to its customers from 1994 to 2002.
GSIS President Winston Garcia buried Meralco deeper when he commented during the hearing that Meralco should not only be paying for electricity it uses, but that it should be paying at the commercial rate of eight pesos per kilowatt hour.
This position of Garcia makes sense since Meralco is a commercial enterprise for profit. Now, is it any wonder that Meralco posted a 60-percent increase in revenues in the first quarter of this year?
Commission chair Senator Miriam Defensor Santiago also made a valid point when she wondered why Meralco buys power from the wholesale electricity spot market (WESM) during peak hours when prices are naturally high, while it sources power from its own independent power producers (IPPs) during non-peak hours.
She said there might be an effort to show that Lopez-owned IPPs sell cheaper power than National Power Corporation and WESM.
On the IPP issue, Enrile quizzed Meralco officials about the ownership structure of Meralco and its IPPs and the apparent corporate layering. The Meralco talking heads went silent, disavowing any knowledge about the issue.
Meralco dealing with its own IPPs is a big issue when it comes to lowering power rates in the country because we have here a case of the Lopezes dealing with themselves. This is why Garcia had been asking for full transparency in Meralco.
Transparency on where it sources not only electricity, but also its meters, transformers, wires, etc. Transparency in its collection of electric bills from sister companies and transparency in the contracts entered into by Meralco, including insurance agreements with what is suspected to be a bogus insurance firm based in the Bahamas.
Garcia may have opened a can of worms at Meralco and it is in the interest of all Filipinos to make the Lopezes accountable to Meralco shareholders and customers, and to the fullest extent of the law.
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The 33rd Oasis Park Hotel Invitational Golf Tournament starts on Monday, April 19, 2008 at Canlubang. Tuesday it goes to Malarayat; Wednesday is Forest Hills; Thursday is at Riviera and Friday at Canlubang, again.
This is a tournament that brings players into the country from Europe, Asia and even America and is held two to three times a year. It ought to be endorsed by the Department of Tourism. In fact, the DOT ought to organize golf tours as they do in Thailand.
Bill Percy, the President of Oasis Park Hotel on Belen St. in Paco has been running this tournament for his friends and hotel clientele who come from all over the world. It is five days of golf, camaraderie and a lot of partying.
Local players are welcome to join. There’s a lot of friendly betting that goes on. I will sometimes play in one or two of the days. Five days of golf is a little much for me.
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hvp 05.15.08)
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