08/29/2011
  No, it’s not the sci-fi 
action flick we are writing about. It’s about the real “Transformers” in
 our world — those giant, steel-hearted, mechanical monsters roaming the
 boardrooms of power companies that “transform” public utilities into 
humongous profit machines. It’s about power companies that transform the
 public’s need for electricity into an unimaginable nightmare for 
millions of Filipino consumers.
Once the Lopez Group, the 
Philippine Electric Corp. (Philec) and the Manila Electric Co. (Meralco)
 are both seen in this light. One supplies actual power transformers and
 related equipment to the other at what many consider as massive 
transfer prices of up to 500 percent or more. Our source, who will only 
testify in public once Congress musters the courage to conduct an 
honest-to-goodness investigation, claims to have the goods on this.
For
 a time, as Meralco transitioned from the old guard to the new, sanguine
 hopes about the eventual dissolution of the tight embrace between the 
two said companies were raised. It was even claimed that power prices 
will be brought down since that kind of a set-up will end with the 
change in management.
It has been pointed out by industry watchers
 that these so-called “sweetheart deals” form a major component of 
Meralco’s capital base submission to the state regulatory body, the 
Energy Regulatory Commission (ERC), upon which the past 12-percent 
Return-on-Rate Base (RoRB) and the current 15.8-percent Performance 
Based Regulation (PBR) rate setting schemes are computed. If the 
supplies and equipment — from transformers, electric poles, to project 
costs of installations such as substations or plants — are overpriced by
 exponential percentages, then so are our electricity rates.
The 
source of this news has, in fact, gone directly to the original 
equipment manufacturers (OEMs) of Philec which price power transformers 
for each mega volt-ampere (MVA), similar to horsepower in engines.
In
 the Taiwan OEM plant visited by our informant for the purpose of 
getting the real bottom price, for instance, a quote of P250,000/MVA was
 given — far less than the P600,000/MVA reported in the Philippines, 
even if the usual discounts of 30 and 15 percent given to buyers, 
including most Philippine electric cooperatives, were to be deducted.
 Further, if a high-end Japanese brand is preferred, which the Taiwanese
 plant also officially produces, then a simple expedient of tacking on 
the Japanese brand’s steel plate for it to be priced higher is resorted 
to.  Is this what Meralco does?
In claiming the need for a 
top-of-the-line variant, it uses the Japanese name plate to increase the
 quote as well as its capital base with the ERC — which the regulating 
agency unfortunately approves without as much as a whimper — to the tune
 of P1,600,000/MVA!
 When the Lopez Group sold control of Meralco,
 there was indeed that opportunity to cut the monopolistic relationship 
between the two inextricably linked power firms, with hopes that rates 
will go down in spite of the already escalating bent of the onerous PBR.
 But nothing has changed.  Filings made for the power distributor’s 
capital expenditures continue to be based on vastly overpriced claims; 
hence, its 80 to 90 percent yearly profit increases.
Fortunately, 
power consumers all over the country have begun to understand more 
comprehensively the massive swindle that is the Electric Power Industry 
Reform Act (Epira), or the post-Edsa II power privatization law that has
 spawned many “monsters:”
From the ERC that is believed to be 
captured by Meralco; to the state holding firm Power Sector Assets and 
Liabilities Management Corp. (Psalm) that is petitioning for consumers 
to shoulder the Universal Charge that will pay for $18 billion (still!) 
in National Power Corp. (Napocor) debts, which were promised to have 
been paid with privatization but never were; to the National Grid Corp. 
of the Philippines (NGCP) that wants to raise rates to pay for damages 
caused by typhoons “Ondoy,” “Basyang,” etc., leaving its multi-billion 
insurance untouched; to the Philippine Electricity Market Corp. (Pemc) 
that wants to raise rates for “administrative modernization” (a 
euphemism for raising officers’ salaries); to its adjunct, the Wholesale
 Electricity Spot Market (Wesm), which averages rates based on the 
highest (instead of the lowest) fluctuations, there are certainly more 
Epira monsters to discover — and decipher.
What puzzles is that 
Congress, which is into every sort of investigation imaginable, has not 
touched on the festering and oppressive electricity scams being 
perpetrated right before our very eyes. It seems the likes of Rep. 
Henedina Abad and Sen. Serge Osmeña, who head their respective chamber’s
 energy committees, are oblivious to appearing as stooges of these power
 giants.
Given this, will anyone else take the cudgels for the 
suffering Philippine economy, our industries, and our people? Or is 
everyone just too scared of the Philippines’ very own, steel-hearted, 
steel-fisted “Transformers”? The answer need not be more than meets the 
eye.
(My new e-mail: mentong2011@gmail.com.  Tune in to Sulo ng 
Pilipino/Radyo OpinYon, Monday, Wednesday, Friday, 5 to 7 p.m., and 
Tuesday, Thursday, 5 to 6 p.m. on 1098AM; Talk News TV with HTL, 
Saturday, 8:15 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable 
Channel 8; visit http://newkatipunero.blogspot.com for our articles plus
 TV and radio archives) 
(Reprinted with permission from Mr. Herman Tiu-Laurel)
Source:  The Daily Tribune
URL: 
http://www.tribuneonline.org/commentary/20110829com5.html