More power lies

DIE HARD III
Herman Tiu Laurel
8/9/2006



I think this was the only space that took notice of the grand deception of Gloria and the Lopez’s so-called “rate reduction” stemming from the Meralco purchase of power from the WESM (wholesale electricity spot market), aside from the report in one newspaper internet edition that popped up and out and up again (I don’t know if it ever saw print on the hard edition). What really frustrated me the whole day was waiting for commentaries and reports of this grand deception over the radio and TV broadcasts, and I didn’t catch anything.

I texted one young congressman to discuss on their program with two journalists and a congressional colleague of his, he wasn’t on the air that day but I would think such an important issue would not escape the attention of the others. Unfortunately for the public there was no mention of the issue on their two hour daily morning radio program, and I wasn’t surprised when I heard the “north Luzon tollways corporation” radio spots aired – as we all know, the Lopezes also control and run that operation. It seems that my column and radio are the only ones raising the alarm on the new Gloria and Lopez stunt.

That’s very, very sad, because the public is being taken for a very costly ride again: billions will be added to their taxes for pogi points Gloria and the Lopezes are scoring. But there is more to these and Freedom from Debt Coalition has expressed apprehension that the Masinloc deal may be involved in this trick of Gloria and the Lopezes, as I surmise from succeeding news items quietly tucked into unobtrusive corners of the news: one reporting the scrapping of a mandated P0.30-centavos rate reduction and the other that Meralco seeks more “bilateral power contracts”.

One report says “EPIRA-mandated rate reduction (of P 0.30 for supply sourced from National Power Corporation) … shall be scrapped once these are already procured via the Wholesale Electricity Spot Market”. It should be clear from this that Meralco avoided or evaded this P 0.30 rate reduction specified by law for its purchases from NPC for the benefit of the public when it started sourcing from WESM, aside from the fact that NPC was forced to dive its rate and transfer its losses from this to taxpayer. The Lopezes are certainly no Good Samaritans.

The other report on bilateral power contracts that “seek to guarantee reliable power supply to avoid exposure to price volatilities in the spot market” is more enigmatic as it clearly contradicts the high praises for the spot market! Bilateral contracts are the same ones Meralco has with its own IPPs (independent power producer) which are higher rates than what NPC supplies, but isn’t the WESM supposed to provide the cheapest power because of so-called “competition? These contradictions indicate something fishy is being set up by the Lopezes, Meralco and Gloria.

There is one dilemma where the three players Gloria, the Lopezes and FVR intersect: the Masinloc problem. Are they laying the ground for the project to go to a favored but, this time, less contentious group. The Lopezes can give the long sought for “supply contract” a.k.a. “bilateral contract” to the Masinloc project while Meralco skirts the EPIRA mandated P 0.30 rate reduction and gets extra-profits taxpayers shoulder. The Lopezes can be part of the new Masinloc deal with FVR’s foreign crony assured– all of them are happy together, all paid for by the Filipino consumers and taxpayers.

The privatization program has been one big scam where the Filipino has been given false promises about the virtue of competition that has never and will never come from it because it is entirely manipulated by corrupt government authorities and bureaucrats in the pockets of corrupt Big Business. The revenues from sale and distribution of power should have gone to amortizing debts of Napocor but instead it has all gone to private Big Business while the debts have been left on Napocor and the taxpayers’ shoulders. This is what our forensic economist Hero Vaswani of KME said:

“On your column Mentong… way to go… Please point out the utter hypocrisy of our so called market expert Joey Salceda. Market principles dictate that in case of over- supply prices should go down. That is what equilibrium is all about. But with that implicit take or pay contract which is priced in dollars we got hit twice over with the multiplier effect. In effect we subsidize foreign capital. It is time to put NAPOCOR into bankruptcy. Privatizing the assets will do no good as the implicit debt (foreign) risk capital continues this time under more onerous terms.

“…Restructure Napocor the same way Mirant restructured in the U.S. under Chapter 11. Please note that the case of Banco Filipino vs. the old Central Bank is worth noting. The charter of the old CB was canceled. A new abstract was established by law - BSP. They can no longer sue. Either re-structure NAPOCOR under fairer terms or shut it down and let a new leaner institution take over. The government is trying implicitly to restructure NAPOCOR but under a creditor imposed conditions. This is patently unfair and unjust. Are we all getting dumb and dumber. Argentina
and Bolivia has done this already with their water and power contracts.”

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