“The provisions on cross-ownership in the current Epira Law are full of loopholes because cross-ownership is not forbidden outright but is only regulated by the Energy Regulatory Commission (ERC).”
by Ducky Paredes
After celebrating Independence Day, we should ask ourselves whether we are now truly free from the colonial masters or from foreign interference. The reality is that we are not, as the Joint Foreign Chambers (JFC) reminded us when they advised Gloria Arroyo not to allow the amendment of the Epira and instead, continue with it until all of Napocor’s assets shall have been disposed of by the Power Sector Assets and Liabilities Management Corp. (PSALM).
This may well be good advice; sadly, of course, the foreign business community is poised to take over a lot of the power units that the Napocor is selling and the foreigner will have a stronger hold on our power sector.
It used to be that the power sector was purely in Pinoy hands. In fact, we had engineers who could build power plants from the ground up. Yet, when we needed extra power units, the government turned to mostly foreigners for those Independent Power Producers (IPPs) who would not do so without a take or pay provision to them. To make matters worse, the Lopez family, the controlling majority in Meralco, also invested in their own IPPs and also wrote their own take or pay provision. This was totally wrong since there was really no need to do this.
The IPPs commissioned by the Napocor were done at a time when the country needed the extra power. The IPPs of Meralco came when those Napocor IPPs were already on stream; besides, Meralco’s main supplier should have been the Napocor, not the Lopez power plants. Meralco and Napocor has a contract that said that this was so.
The Epira that was supposed to lower electricity costs by opening up the market to all interested players was frustrated when the Lopezes built their plants and gouged Meralco and its customers with their incestuous highly unfavorable contract.
Let’s get back to the colonists. Acting as if the Philippines were still a colony of their respective countries, members of JFC, a lobby group representing business interests from the United States, Australia, New Zealand, Canada, Japan, Europe and South Korea, demanded that the Epira not be amended even as the Senate and the House of Representatives have come to realize how deeply flawed the Electric Power Industry Reform Act (EPIRA Law is.
According to Senator Edgardo Angara the JFC’s primary motive for its call, was to preserve the status quo in the power sector because the EPIRA loopholes that allow Meralco to overcharge consumers are also useful to foreign power investors.
Birds of the same feather flock together. It’s all about corporate greed with the Lopezes, Meralco and their foreign allies standing together just as the conquistadores used the mestizos used to work together to make the lives of us Indios miserable. The National Labor Union (NLU) called it right when it said that the Lopezes fancy themselves as the new ilustrados.
At the House, Rep. Luis Villafuerte slammed JFC and explained: “The abuses committed by Meralco in the name of the highly defective EPIRA is now public knowledge. Public outrage over these excesses has provided us the momentum to amend.”
The provisions on cross-ownership in the current Epira Law are full of loopholes because cross-ownership is not forbidden outright but is only regulated by the Energy Regulatory Commission (ERC). But, we have all seen how the ERC actually works. Most of the time, the ERC acts as if it were lawyering for the power industry, instead of regulating it.
For sure, the Lopezes and JFC do not want EPIRA to be touched because it has so many provisions that allow Meralco to get away with gouging consumers through pass-on charges of their own electric consumption and system loss.
On average, Meralco saddles its 4.4 million customers with half-a-billion pesos of its own electric consumption and about P17 billion in system loss each year. Those are billions of pesos that are added on to your electric bills. Billions that are better spent by barely surviving Filipino families to buy rice, food and other basic necessities.
The Lopezes are in both power generation and power distribution even if Meralco is not. The Lopez family has investments in First Gas, First Gen and the Quezon coal-fired power plant while also holding the majority in Meralco, a power distribution company.
The preference of Meralco to buy power from Lopez IPPs is also a form of cross subsidy and a species of monopolistic practices, which the EPIRA prohibits but the ERC does not enforce. Likewise, lawmakers are out to correct the anomalous situation in which Lopez IPPs are getting take-or-pay benefits in their power purchase agreements with Meralco, which should rightfully belong only to IPPs that operate under build-operate-transfer (BOT) contracts.
BOT IPPs will eventually transfer their power plants to the government, while Lopez IPPs perpetually remain as the property of the Lopezes. So, why should they be enjoying the same perks as those that will eventually accrue to government?
There are a lot of things that need to be reformed in the power sector. Sadly, the Epira Law was diluted as it was going through the conference committee between the Senate and the House. In the end, as happens with many of our laws that are written under the influence of lobbyists, it was the interests of the lobbyists that were protected by the law and not the interests of the more numerous customers of Meralco, the Filipino People.
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The Federation of Philippine Amateur Senior Golfers, Inc. (FPASGI) will hold its third fun tournament for the year with a game at Fernando Air Base Golf Course in Lipa City, Batangas on Friday, June 20, 2008. Tee-off is sequential beginning at 7:00 a.m.
The Fernando Air Base Course is built on mostly flat land since the base was built around a landing strip. This is among the interesting Philippine courses since it was built by Filipino gofers using only native grasses, mostly Carabao grass, like the Del Monte Course in Bukidnon, the Veterans Course and the Villamor and Navy Courses.
The main feature of the FAB course is the 18th Hole Par 6, which is 666 years long,
All FPASGI members and their guests are welcome. Unlike the San Mig Sugar Free Tournaments which are for FPASGI members only, fun tournaments accept guests of FPASGI members. Tournament fee is only P1,000 which includes the Green Fee, Caddy, Registration Fee, Mulligan and Raffle Prizes. Food is for the players’ own account.
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hvp 06.15.08)
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