Meralco-Napocor settlement: NOT OK

CONSUMERS DEMAND!
Herman Tiu Laurel
10/24-26/2011



Last Oct. 18, several mainstream newspapers headlined “CA okays P14B Napocor-Meralco compromise,” which could have led many to conclude that things are all honky dory for the parties concerned. No, the compromise agreement is definitely NOT OK. The Court of Appeals (CA) just said that the Pasig Regional Trial Court (RTC) can deal with the issue, which the Solicitor General still disputes.

If you are unable to connect the relevance of this news to your daily life, please read along. I’m sure the vast majority of citizens still do not know the particulars of this case even if it is of huge importance to them, given that it might potentially cost them an additional arm aside from the other limbs already taken by Meralco.

The dispute stems from power distributor Meralco’s violation of its contract in 1994 to purchase P42 billion worth of electrical power from the National Power Corp. (Napocor). At a great loss to government, Meralco reneged on its obligations when it set up its own IPPs (independent power producers) and bought from them (or itself) instead of Napocor.

In the ensuing suits at the Pasig RTC, and after much haggling, Meralco and Napocor finally settled on a P14-billion penalty for the former, which penalty--take note--they agreed to PASS ON TO CONSUMERS!

This extremely lopsided compromise agreement represented a loss of at least P28 billion to government and, worse, the penalization of millions of consumers who were never a party to the contract or negotiations.

The Solicitor General’s office, in pursuing its mandate to protect government’s interest, faulted Napocor for not having the authority to enter into such an agreement and for failing to consult with other concerned agencies adversely affected by the deal. The SolGen then went to the CA to question the jurisdiction of the Pasig RTC, after which a TRO (temporary restraining order) was issued.

Consumer protection groups also eagerly awaited the outcome of this case since the Pasig RTC is believed by many to have a track record of being under the influence (or payroll) of Meralco. It was in this Pasig RTC where one of our original petitions questioning the constitutionality of the EPIRA (Electric Power Industry Reform Act) was made to drag for several years before being trashed.

While we could have gone to the Supreme Court after that, the repression of the Arroyo regime, plus the 2004 elections, overtook the issue. Had FPJ (who was against the EPIRA) won, that disastrous law could have been reversed.

Going back, the recent CA decision said, “Petitioners’ fear that the settlement agreement would be a burden to the consuming public who were not able to participate in the mediation proceedings is an unconfirmed assumption.” Oh, really?

So why did the dissenting opinion from Justice Japar Dimaampao say that the CA majority “deprived the public of their ‘right to probe into the burdensome ‘pass-through’ (provision),” arguing that since the “people stand defenseless against the inauspicious consequences ensuing from the settlement agreement… Why should we allow Meralco to pass on the buck to us? Why should we be made to pay the horrendous obligation of Meralco?”

Thank you, Justice Dimaampao. The SolGen now has the option to raise the issue to the Supreme Court which we believe we can win. But at the same time, we in the anti-power plunder group believe that it is still best to go beyond the jurisdictional question and thresh out the demerits of the settlement agreement itself.

The SolGen’s position is both correct and imperative: To prevent government agencies such as Napocor from going on their own--abusing their authority--to negotiate, which is an open avenue for graft and corruption. Besides, Meralco’s owners already have a long track record of exercising their political and media clout to influence corrupt regulatory agencies. The result is that we always lose and get screwed as taxpayers and consumers.

The consumer protection movement, even consumers themselves, should work even harder to oppose this settlement agreement outside the courts, by including it as one of the issues in a planned “vigil” (a la Occupy Wall Street).

The fight over this compromise deal represents one of the best opportunities to put both Meralco and Napocor on the spot while we batter them with other cases to be brought to the courts by our anti-power plunder group.

But then, there is another matter that power consumers of this country must take note of, which mainstream media is practically blind to. The “provisional reset” of Meralco’s PBR (Performance Based Rape… este, Rate) and its MAP (Maximum Average Price) of P1.60/kWh are being torpedoed despite formal opposition from Mang Naro Lualhati and the anti-power plunder group that it should be not more than P0.90/kWh.

That was the subject of the last hearing at the Energy Regulatory Commission (ERC) where consumer representatives were given a runaround--as the hearing schedule was switched from 9:00 am to 2:00 pm, in order to confuse the public, which has already relied on the ERC website or its public bulletin board just outside the hearing room. It’s good that we stayed on so as not to be declared in default. We were able to force the ERC to postpone the hearing on the PBR reset request of Meralco. But then, as if railroading their plans, the ERC still granted Meralco a provisional increase without any public hearing. The people must resoundingly reject this and penalize culpable ERC officers. This outrage cannot be tolerated any minute longer.

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