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.)
Monday, March 7, 2011
EPIRA cohorts - economic saboteurs
INFOWARS
Herman Tiu Laurel
5/12/2008
Power crocodiles on GMA’s side call the Lopezes power sharks. GMA’s economic adviser Joey Salceda point to the IPPs (international power pirates), and Chiz Escudero says it’s the RVAT on “systems loss” while the Lopezes says it’s the tax on Malampaya gas, Mikey Arroyo and Juan Ponce Enrile says it’s the lack of “open access” to entice other “players” (i.e. other power pirates) to partake of the PPA plunder. There are countless opinions and propositions on the burning issue of high Philippine electricity cost and the role of Meralco, the IPPs and the GMA regime in the power price crisis. They’re all quacks harping on symptoms rather than the cancer at the root – the EPIRA privatization and deregulation of power.
Before the EPIRA privatization, electricity generation and distribution was still in principle a government service to empower the nation and the people to pursue modern conveniences, productivity and national development. Whatever sins of the government run power industry and the NPC since its establishment in 1936, causing power rates to be the highest in Asia was never one of them. The Philippines waited for the EPIRA’s privatization from Edsa Dos to earn that distinction of having the “highest power cost in Asia”.
Privatization and deregulation in the world started in the late 80s with Tatcherite and Reaganite economics revolution in the U.K. and the U.S. Neo-conservatives and Big Business began funding academes and politicians to ram through power privatization and deregulation laws, mainstream media to demonize state and public power utilities, and banking institutions followed suit with debt-for-privatization schemes. The IMF-WB-ADB started tying loan packages to Third World country to power privatization and deregulation, which led many Third World countries into that trap. South America was particularly targeted by U.S. companies using corrupt and surrogate governments in the 90s in Argentina, Brazil, Venezuela and others to privatize state energy firms.
In Asia, the State of Maharastra, India, in 1996 allowed Enron set up a power plant and within a year power rates shot up prompting massive demonstrations that eventually led to its closure. Indonesia under the dictator Suharto was a compliant leader and accepted privatization of many public energy companies, but the high prices put the foreign IPPs at odds with Indonesians which led to contentious cases filed in the international courts. When Suharto fell many of the IPPs in Indonesia were renegotiated. In South American many countries are currently reversing and re-nationalizing the privatization and deregulation of the last decade, under the new, patriotic or nationalist governments of Krichner, Lula and Chavez.
In 2001 Philippine newspapers cited the real reason for the fast tracking of the EPIRA by the GMA regime. In the i-Report of the PCIJ, which is just one among dozens one could quickly pick up on the Internet, this headline ran: “Short-circuited Reforms in the Power Sector - EPIRA’s passage in 2001, in fact, was a condition for the release of much-needed loans from the ADB and Japan Export-Import Bank amounting to $950 million. ...” The reforms deformed the power sector, but Gloria Arroyo couldn’t wait and got the Lopezes to bankroll the payola (distributed by then Speaker Sony Belmonte) to congressmen of the lame duck Congress to railroad the EPIRA. Arroyo also got then NEA (National Electrification Administration) chief Noel Sanchez to release P 10-M per congressmen for power projects.
EPIRA’s power rates practically doubled but it was kept under wraps for a year as Gloria ordered Napocor to hold the rate increase in abeyance. Due to mounting debts NPC was forced to raise rates a year later, then the nation learned of the evil PPA and IPPs. Such bitter experiences is not limited to us, Americans were even worse hit by sudden increases in power rates after privatization and deregulation – culminating in the $ 50-B Enron swindle of California. One website in the U.S I recommend to our readers to visit is Common Dreams, which published one report published by Public Citizen entitled: “It’s Greed Stupid! Debunking the Ten Myths of Utility Deregulation”, by Wenonah Hauter and Tyson Slocum”. In Myth # 2 that deregulation will lower costs for consumers, it said:
“Deregulation has been sold to the public as a way to lower prices. Unfortunately, the inverse is often true… Now, as wholesale prices have skyrocketed since last year (2001), proponents argue that consumer rates will have to increase to encourage more competition.” When deregulation is under fire: “Myth # 1: Deregulation does not work because California did not deregulate enough.’ … Advocates for deregulation say that if … consumers paid for the real cost of electricity through a free market, there would not be a problem. But they fail to mention that … the cost of wholesale electricity has at times been almost 4,000 percent higher than before deregulation because … of the profiteering on electricity trading at the Power Exchange.“ California’s Power Exchange is the WESM here, and like in California the buyers and sellers manipulate the market to maximize profit.
GMA, Garcia, the Lopezes, WESM directors, senators and congressmen – they are all to blame. Economic saboteurs and traitors all! : The Lopezes did not pay for Meralco, it’s the power consumers who did. Consumers are not obliged to respect Cory Aquino’s crony franchise to the Lopezes to profit from our electricity payments. It was anomalous from the start, to give the minority Lopezes the right to manage the public firm and supply it power and equipment through Lopez subsidiaries. GMA (and FVR) is worse, selling out national interest to the IPPs, destroying the national economy and impoverishing millions of Filipinos. Legislator sold out for a few pieces of silver from the ADB and other multi-lateral financial agencies; and mainstream media kept the public befuddled by abdicating its duty to help the public piece the puzzle into one intelligible issue: privatization of public utilities is plunder.
To solve the power price crisis: junk EPIRA and restore electricity as a public utility; confiscate and nationalize Meralco; re-nationalize all IPPs; appoint credible officials to the regulatory agencies with the mandate to align rates with the regional average. Privatization for profit is no option at all. Nasecore’s Pete Ilagan is calling for “cooperativization” which is really taking private corporations out and restoring power to the public. Government corruption is cited for opposition to nationalization, but experience with cooperatives raise the same problem – unreliable coop leaders; but profit seeking corporations are the worst. The solution is good men to provide good government, but our present political system can’t make this happen. – Back to the Revolution.
(Tune in to 1098AM, “Kape’t Kamulatan, Kabansa” 8:30-9am, Monday to Friday)
Herman Tiu Laurel
5/12/2008
Power crocodiles on GMA’s side call the Lopezes power sharks. GMA’s economic adviser Joey Salceda point to the IPPs (international power pirates), and Chiz Escudero says it’s the RVAT on “systems loss” while the Lopezes says it’s the tax on Malampaya gas, Mikey Arroyo and Juan Ponce Enrile says it’s the lack of “open access” to entice other “players” (i.e. other power pirates) to partake of the PPA plunder. There are countless opinions and propositions on the burning issue of high Philippine electricity cost and the role of Meralco, the IPPs and the GMA regime in the power price crisis. They’re all quacks harping on symptoms rather than the cancer at the root – the EPIRA privatization and deregulation of power.
Before the EPIRA privatization, electricity generation and distribution was still in principle a government service to empower the nation and the people to pursue modern conveniences, productivity and national development. Whatever sins of the government run power industry and the NPC since its establishment in 1936, causing power rates to be the highest in Asia was never one of them. The Philippines waited for the EPIRA’s privatization from Edsa Dos to earn that distinction of having the “highest power cost in Asia”.
Privatization and deregulation in the world started in the late 80s with Tatcherite and Reaganite economics revolution in the U.K. and the U.S. Neo-conservatives and Big Business began funding academes and politicians to ram through power privatization and deregulation laws, mainstream media to demonize state and public power utilities, and banking institutions followed suit with debt-for-privatization schemes. The IMF-WB-ADB started tying loan packages to Third World country to power privatization and deregulation, which led many Third World countries into that trap. South America was particularly targeted by U.S. companies using corrupt and surrogate governments in the 90s in Argentina, Brazil, Venezuela and others to privatize state energy firms.
In Asia, the State of Maharastra, India, in 1996 allowed Enron set up a power plant and within a year power rates shot up prompting massive demonstrations that eventually led to its closure. Indonesia under the dictator Suharto was a compliant leader and accepted privatization of many public energy companies, but the high prices put the foreign IPPs at odds with Indonesians which led to contentious cases filed in the international courts. When Suharto fell many of the IPPs in Indonesia were renegotiated. In South American many countries are currently reversing and re-nationalizing the privatization and deregulation of the last decade, under the new, patriotic or nationalist governments of Krichner, Lula and Chavez.
In 2001 Philippine newspapers cited the real reason for the fast tracking of the EPIRA by the GMA regime. In the i-Report of the PCIJ, which is just one among dozens one could quickly pick up on the Internet, this headline ran: “Short-circuited Reforms in the Power Sector - EPIRA’s passage in 2001, in fact, was a condition for the release of much-needed loans from the ADB and Japan Export-Import Bank amounting to $950 million. ...” The reforms deformed the power sector, but Gloria Arroyo couldn’t wait and got the Lopezes to bankroll the payola (distributed by then Speaker Sony Belmonte) to congressmen of the lame duck Congress to railroad the EPIRA. Arroyo also got then NEA (National Electrification Administration) chief Noel Sanchez to release P 10-M per congressmen for power projects.
EPIRA’s power rates practically doubled but it was kept under wraps for a year as Gloria ordered Napocor to hold the rate increase in abeyance. Due to mounting debts NPC was forced to raise rates a year later, then the nation learned of the evil PPA and IPPs. Such bitter experiences is not limited to us, Americans were even worse hit by sudden increases in power rates after privatization and deregulation – culminating in the $ 50-B Enron swindle of California. One website in the U.S I recommend to our readers to visit is Common Dreams, which published one report published by Public Citizen entitled: “It’s Greed Stupid! Debunking the Ten Myths of Utility Deregulation”, by Wenonah Hauter and Tyson Slocum”. In Myth # 2 that deregulation will lower costs for consumers, it said:
“Deregulation has been sold to the public as a way to lower prices. Unfortunately, the inverse is often true… Now, as wholesale prices have skyrocketed since last year (2001), proponents argue that consumer rates will have to increase to encourage more competition.” When deregulation is under fire: “Myth # 1: Deregulation does not work because California did not deregulate enough.’ … Advocates for deregulation say that if … consumers paid for the real cost of electricity through a free market, there would not be a problem. But they fail to mention that … the cost of wholesale electricity has at times been almost 4,000 percent higher than before deregulation because … of the profiteering on electricity trading at the Power Exchange.“ California’s Power Exchange is the WESM here, and like in California the buyers and sellers manipulate the market to maximize profit.
GMA, Garcia, the Lopezes, WESM directors, senators and congressmen – they are all to blame. Economic saboteurs and traitors all! : The Lopezes did not pay for Meralco, it’s the power consumers who did. Consumers are not obliged to respect Cory Aquino’s crony franchise to the Lopezes to profit from our electricity payments. It was anomalous from the start, to give the minority Lopezes the right to manage the public firm and supply it power and equipment through Lopez subsidiaries. GMA (and FVR) is worse, selling out national interest to the IPPs, destroying the national economy and impoverishing millions of Filipinos. Legislator sold out for a few pieces of silver from the ADB and other multi-lateral financial agencies; and mainstream media kept the public befuddled by abdicating its duty to help the public piece the puzzle into one intelligible issue: privatization of public utilities is plunder.
To solve the power price crisis: junk EPIRA and restore electricity as a public utility; confiscate and nationalize Meralco; re-nationalize all IPPs; appoint credible officials to the regulatory agencies with the mandate to align rates with the regional average. Privatization for profit is no option at all. Nasecore’s Pete Ilagan is calling for “cooperativization” which is really taking private corporations out and restoring power to the public. Government corruption is cited for opposition to nationalization, but experience with cooperatives raise the same problem – unreliable coop leaders; but profit seeking corporations are the worst. The solution is good men to provide good government, but our present political system can’t make this happen. – Back to the Revolution.
(Tune in to 1098AM, “Kape’t Kamulatan, Kabansa” 8:30-9am, Monday to Friday)
Junk EPIRA to stop power lies
INFOWARS
Herman Tiu Laurel
5/5/2008
One objective of the hidden forces behind Edsa II was the passage of the electricity sector privatization law. Four months after President Estrada was ousted, the Electric Power Industry Reform Act (EPIRA) was certified as urgent and passed by a lame duck Congress. They had no decency to wait for the new elected Congress. Gloria later upped the ante with that TV ad of a couple elating over a new electric fan to cool them due to the cheaper electricity they enjoyed because of the Epira. A year later, the country was shocked by a doubling of electricity bills, only to learn that Gloria had actually ordered Napocor (NPC) to halve the actual costs to hype up EPIRA's so-called, "benefits." Gloria's instruction bloated the debt of the already indebted NPC, which could not be sustained without raising electricity rates dramatically a year later.
It was only then that Filipino consumers learned the truth about the PPA (Purchased Power Adjustment) and the IPP's (Independent Power Producers), and what great con game electricity privatization and deregulation was. The promise of lower rates through competition and transparency was all false hope, given to hoodwink people into giving up public control of the power industry. Epira created layers upon layers of legal obfuscations, including the Wholesale Electricty Spot Market (WESM), a fully-deregulated structure that negated any regulatory power of the Energy Regulatory Commission (ERC).
In 2006, Gloria vaingloriously inaugurated the WESM operation and promised lower rates for the nth time, and again instructed NPC to bid low in WESM at P2.72/kWh to impress the pubic; but by WESM's third month, it became P4.853/kWh and eventually reached almost P 11/kwh by the end of 2006. A furor ensued as Wesm accused NPC of price manipulation in a market mechanism that was guaranteed to stamp out manipulation. An investigation of alleged NPC price manipulation in the WESM was conducted through 2007 but the NPC was cleared. Meantime, WESM directors (who are also power industry executives already receiving huge pays from their mother companies) applied with ERC for P500-million operating expenses and got them approved, which means WESM directors will get pays charged to electricity bills.
And as WESM rates fluctuated monthly and were difficult to follow, a year later, another inordinate increase sprung from Meralco. Last April 23, 2008 newspapers headlined, "Meralco hikes rates." A day later, the Inquirer, succumbing to Meralco's PR blitz, headlined it and spun it as "Coal lack hikes Meralco bill." It had nothing to do with coal but with transfer pricing by the Lopezes buying at peak rates through WESM from their own IPP's. Meralco's captive columnists, particularly one in the Inquirer, started spewing out disinformation that the increase was due to the high NPC-WESM rate, allegedly higher than Meralco's rate. One radio anchor on DZXL picked up on the disinformation and spread the distortion.
Nasecore's Pete Ilagan informed us that the NPC rate electric cooperatives were getting was P4.11/kwh, which Meralco should have gotten. Meralco's claim was that NPC charged it P7.27/kwh through WESM. On April 25, however, Wesm replied that Meralco's rate was high because it chose to buy at peak hours. Why would Meralco deliberately buy at peak hours if it were not to benefit the Lopez IPP's, namely, Sta. Rita, San Lorenzo, Duracom and Quezon Power, and put down NPC?
My April 25 column summarized it: "The Great Con in the Philippines this week is: Meralco's rate increase attributed to the 'coal lack' or rising fuel prices. The real cause is the Wholesale Electricity Spot Market (WESM) in the electricity sector privatization…. The truth is Meralco bought the highest cost power from their own Lopez-owned IPPs … Wesm is the idea in California that Enron used to fleece $50-billion from California power consumers." California started electricity deregulation in 1996. Deregulation required a sell off of generating assets of publicly-owned companies like San Diego Gas and Electric or Pacific Gas and Electric to private companies like Enron which traded in the spot market. Its spot market started in 1998 with the same promise as ours. But instead of bringing down power costs, rates significantly rose.
By June of 2000, California started experiencing power blackouts--the first signs of manipulations to push prices even higher (as we experienced a few weeks ago simultaneous with the coal shortage scare). San Diego Gas and Electric filed cases of market manipulation against Enron et al but it soon went bankrupt while Enron raked it in until its $50-billion collapse and investigation for market manipulation and accounting fraud. Enron's collapse dragged down another U.S. energy company – Mirant which by 2003 filed for a $5-billion bankruptcy; but had a ready fall back in the Philippine electricity market.
As it joined Gloria Arroyo's corporate conspirators cum Board of Economic Advisers, this company backed Arroyo's coup and acquired the richest IPP's, which netted it windfall profits primarily because its IPP's were collecting PPA's without producing any electricity - thanks to the sovereign guarantees. Mirant has since unloaded its Philippine assets after siphoning away what we estimate to be $10-billion. In like manner other foreign firms in the power sector are tied in with their local conduits like the Lopezes, Aboitizes, Alcantaras et al. Ostensibly, their strategy of fleecing the country involved removing Estrada, who opposed "sovereign guarantees," and installing Gloria, who approved the EPIRA posthaste.
The hardships stemming from the power price manipulations cannot be separated from the lies of Edsa II, Gloria Arroyo, the oligarchs and the wayward media. The current "spat" between Gloria and Meralco is a moro-moro to cover up the distortion and predatory exploitation of privatized electricity that converted power into a commodity for profit instead of an engine for public service and national development. From the public utility that the Constitution defined it to be, electricity or power has now been converted into a private utility for private profit in the EPIRA. Hence, this regime of high power rates and power rate manipulation; which will only get worse until the onerous EPIRA is junked and the power industry is restored to public ownership and control. Until that revolution comes, we are forced to continue bearing the unbearable.
(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.)
Herman Tiu Laurel
5/5/2008
One objective of the hidden forces behind Edsa II was the passage of the electricity sector privatization law. Four months after President Estrada was ousted, the Electric Power Industry Reform Act (EPIRA) was certified as urgent and passed by a lame duck Congress. They had no decency to wait for the new elected Congress. Gloria later upped the ante with that TV ad of a couple elating over a new electric fan to cool them due to the cheaper electricity they enjoyed because of the Epira. A year later, the country was shocked by a doubling of electricity bills, only to learn that Gloria had actually ordered Napocor (NPC) to halve the actual costs to hype up EPIRA's so-called, "benefits." Gloria's instruction bloated the debt of the already indebted NPC, which could not be sustained without raising electricity rates dramatically a year later.
It was only then that Filipino consumers learned the truth about the PPA (Purchased Power Adjustment) and the IPP's (Independent Power Producers), and what great con game electricity privatization and deregulation was. The promise of lower rates through competition and transparency was all false hope, given to hoodwink people into giving up public control of the power industry. Epira created layers upon layers of legal obfuscations, including the Wholesale Electricty Spot Market (WESM), a fully-deregulated structure that negated any regulatory power of the Energy Regulatory Commission (ERC).
In 2006, Gloria vaingloriously inaugurated the WESM operation and promised lower rates for the nth time, and again instructed NPC to bid low in WESM at P2.72/kWh to impress the pubic; but by WESM's third month, it became P4.853/kWh and eventually reached almost P 11/kwh by the end of 2006. A furor ensued as Wesm accused NPC of price manipulation in a market mechanism that was guaranteed to stamp out manipulation. An investigation of alleged NPC price manipulation in the WESM was conducted through 2007 but the NPC was cleared. Meantime, WESM directors (who are also power industry executives already receiving huge pays from their mother companies) applied with ERC for P500-million operating expenses and got them approved, which means WESM directors will get pays charged to electricity bills.
And as WESM rates fluctuated monthly and were difficult to follow, a year later, another inordinate increase sprung from Meralco. Last April 23, 2008 newspapers headlined, "Meralco hikes rates." A day later, the Inquirer, succumbing to Meralco's PR blitz, headlined it and spun it as "Coal lack hikes Meralco bill." It had nothing to do with coal but with transfer pricing by the Lopezes buying at peak rates through WESM from their own IPP's. Meralco's captive columnists, particularly one in the Inquirer, started spewing out disinformation that the increase was due to the high NPC-WESM rate, allegedly higher than Meralco's rate. One radio anchor on DZXL picked up on the disinformation and spread the distortion.
Nasecore's Pete Ilagan informed us that the NPC rate electric cooperatives were getting was P4.11/kwh, which Meralco should have gotten. Meralco's claim was that NPC charged it P7.27/kwh through WESM. On April 25, however, Wesm replied that Meralco's rate was high because it chose to buy at peak hours. Why would Meralco deliberately buy at peak hours if it were not to benefit the Lopez IPP's, namely, Sta. Rita, San Lorenzo, Duracom and Quezon Power, and put down NPC?
My April 25 column summarized it: "The Great Con in the Philippines this week is: Meralco's rate increase attributed to the 'coal lack' or rising fuel prices. The real cause is the Wholesale Electricity Spot Market (WESM) in the electricity sector privatization…. The truth is Meralco bought the highest cost power from their own Lopez-owned IPPs … Wesm is the idea in California that Enron used to fleece $50-billion from California power consumers." California started electricity deregulation in 1996. Deregulation required a sell off of generating assets of publicly-owned companies like San Diego Gas and Electric or Pacific Gas and Electric to private companies like Enron which traded in the spot market. Its spot market started in 1998 with the same promise as ours. But instead of bringing down power costs, rates significantly rose.
By June of 2000, California started experiencing power blackouts--the first signs of manipulations to push prices even higher (as we experienced a few weeks ago simultaneous with the coal shortage scare). San Diego Gas and Electric filed cases of market manipulation against Enron et al but it soon went bankrupt while Enron raked it in until its $50-billion collapse and investigation for market manipulation and accounting fraud. Enron's collapse dragged down another U.S. energy company – Mirant which by 2003 filed for a $5-billion bankruptcy; but had a ready fall back in the Philippine electricity market.
As it joined Gloria Arroyo's corporate conspirators cum Board of Economic Advisers, this company backed Arroyo's coup and acquired the richest IPP's, which netted it windfall profits primarily because its IPP's were collecting PPA's without producing any electricity - thanks to the sovereign guarantees. Mirant has since unloaded its Philippine assets after siphoning away what we estimate to be $10-billion. In like manner other foreign firms in the power sector are tied in with their local conduits like the Lopezes, Aboitizes, Alcantaras et al. Ostensibly, their strategy of fleecing the country involved removing Estrada, who opposed "sovereign guarantees," and installing Gloria, who approved the EPIRA posthaste.
The hardships stemming from the power price manipulations cannot be separated from the lies of Edsa II, Gloria Arroyo, the oligarchs and the wayward media. The current "spat" between Gloria and Meralco is a moro-moro to cover up the distortion and predatory exploitation of privatized electricity that converted power into a commodity for profit instead of an engine for public service and national development. From the public utility that the Constitution defined it to be, electricity or power has now been converted into a private utility for private profit in the EPIRA. Hence, this regime of high power rates and power rate manipulation; which will only get worse until the onerous EPIRA is junked and the power industry is restored to public ownership and control. Until that revolution comes, we are forced to continue bearing the unbearable.
(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.)
Subscribe to:
Posts (Atom)
