EPIRA cohorts will double-deal consumers

INFOWARS
Herman Tiu Laurel
5/19/2008



Gloria Arroyo will meet with Meralco's Manolo Lopez--two Epira conspirators whose clash of interests in the country's electricity industry erupted last week. They’ll meet I surmise: not to solve the high price of power, but talk on divvying up the sector for Gloria's Big Business allies, as the Lopezes bargain for a premium to open up Meralco's mega-franchise. Maybe they'll smoke the peace pipe after, every one of them laughing to their banks again -- on the backs of hapless power consumers.

Mainstream newspaper columnist Billy Esposo wrote: "Meralco customers are better off with the devil they know," arguing that while "power consumers are trapped between the greed of two parties fighting over Meralco… a government takeover will most certainly take us all back to the dark ages, pun intended." He forgets that when the electricity sector was mainly in public hands, it had never been accused of having "the highest power cost in Asia". Esposo lambasts Marcos' power management but forgets that it was Cory who scuttled the hydro-electric projects San Roque, Chico, Casecnan, and Liaban dams, and the Bataan Nuclear Power Plant that led to the infamous blackouts under Cory and her clone Fidel V. Ramos.

Cory's National Power Corp. (NPC) chief was crony Ernie Aboitiz , whose company made billions in importing generators during the blackouts, earning him "The Prince of Darkness" tag. FVR then became the "Father of the PPA" (Purchased Power Adjustment) with the infamous "take or pay” provision. Cory signed in a dozen IPPs; Ramos, around thirty-five; and Gloria the infamous Impsa. Esposo’s favorite whipping-boy President Estrada refused to sign a single IPP contract because of the "sovereign guarantee" in them. Erap deferred several IPP contracts, including the Impsa which Gloria signed ten days after Edsa II.

Billy Esposo, by his own admission, was a Meralco shareholder. As such, he partook of the Meralco plunder, profiting from the Lopezes' crony capitalism in taking Meralco sans capital by the graces of the Edsa I authorities. Meralco proceeded with unethical, conflict-of-interest practices of setting up subsidiaries to supply equipment, services and power to their mother company Meralco. Meralco abuses its power and privileges, including charging electricity consumption of its huge conglomerate to consumers to the tune of P500-million a year. It connives with corrupt politicians to transfer taxes to consumers, keep the interest on meter deposits for its own pockets, ad nausea.

Reflect on it: a generator's electron flow is the same any other's as the quality of electrons from one generator cannot be different from another. And because electricity generation and service require huge investments that only government can consolidate, any attempt to justify privatization inevitably hides the fact that it is always public credit and consumer payments that bankroll such capital-intensive projects. This, for instance, is reflected in the terms of the transfer of the American company, General Public Utilities (GPU), to the Lopezes' MSC (which became Meralco):

"… for a total price of $54.4 million, 10% payable immediately (which was borrowed) and the balance in 9 equal yearly installments . .. with interest at 3% per annum on the unpaid balance. The payment of the second and subsequent installments, with interest, was secured by revolving irrevocable letters of credit issued by a syndicate of 16 Philippine banks, confirmed by a syndicate of 10 United States banks… admittedly a self-liquidating obligation, because the dividends which MSC would receive from Meralco… would take care of the installment payments, with interest, of the MSC obligation to GPU."

In less than a year, the Lopezes sought to increase Meralco rates and got it over the objections of government. Their reason: Meralco needed funds to expand its services. But even then, the Free Press magazine had already argued that Meralco should raise money from its stockholders, not from power consumers. Still, it has always been the method of the Lopezes to raise funds from consumers and claim them as its own to invest in subsidiaries, other public utilities like Maynilad Water, real estate businesses such as Rockwell or road projects such as NLEX. To get these deals, the Lopezes have mastered the art of corrupting various public institutions and officials. In short, they have used Filipino consumers' payments to build their empire.

Electricity began as a novelty and then a luxury. Eventually, its potential for public good and socio-economic development made it a matter of public and national interest. And since electricity serves as an economic driver, national planners realized it had to reach as many citizens as possible. Thus, came huge projects requiring huge credits that only governments could provide, especially when the cheapest source of electricity was to be sourced from gigantic hydro-electric dams. This thesis is proven by such historic projects like the Hoover Dam which helped revive the U.S. economy in the wake of the Great Depression. Electricity is thus a natural government monopoly, which makes government the sole source of real credit backed up by taxes, and the only body responsible for consolidating all sources of cheap and higher cost energy to charge the average lowest rates.

The argument of “choice”, in behalf of the Wholesale Electricity Spot Market (Wesm), does not hold water. The electron and its flow from any generator is the same. There is no product difference--not in packaging, in delivery, scent, color, taste, etc. The only difference is the form of generation, i.e. fossil fuel, coal, hydro-electric, nuclear or others, each with its own cost structure. This is why consolidating all sources to one lowest average power rate is important to ensure democratic pricing of electricity. Otherwise, as we have seen today, Luzon, Visayas, and Mindanao coops and private suppliers all have different prices but are way above Asian averages.

GMA and the Epira conspirators will make a show of lowering power rates a bit. The public has become too aware of the extreme inequity and corruption of power rates under the Epira. The public, however, should not just expect lower rates but demand that these not be higher than the average in Asia. That's between 40% to 50% lower than what Meralco is charging us today or at least P5/kwh less. For this to happen, the Epira and its private profit motive will have to be junked en toto. Gloria and the Lopezes certainly aren't going to allow this; neither are the politicians. We'll need a Social Revolution for this to happen.

(Tune in to Kape't Kamulatan, Kabansa on 1098AM, Monday to Friday, 8:30 a.m. to 9 a.m., and Suló ng Pilipino every Monday, Wednesday, Friday, 6 p.m. to 7 p.m.)