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
