Part Six
President Arroyo pushed Epira’s approval
AFTER the senatorial elections in May 2001 that saw Sen. Juan Ponce Enrile cheated out of the senatorial race, then- President and now Pampanga Rep. Gloria Macapagal-Arroyo pushed the passage of Republic Act 9136, the Electric Power Industry Reform Act. She offered several reasons to convince Congress to pass Epira.
According to her, the passage of Epira was necessary for the World Bank and the Asian Development Bank to release a $950-million loan to the country, arguing that electric power rates would immediately go down by P0.30 per kilowatt-hour (kWh) as soon as Congress passed the law. What happened? Instead of going down, the rates went up, triggering a public outcry. As one of the Senate members then, Enrile was the only one that voted against the Epira when it was approved on June 4, 2001.
“I knew that the Epira would not benefit the people. I went against it because I realized that it would legalize and justify the imposition of unwarranted financial burden on the people under the so-called purchased power adjustment, or universal levy, as the Epira would later call it,” Enrile said.
He wrote Arroyo on March 7, 2001, to warn her about the harmful provisions of the Epira, calling her attention to the market control and monopoly of Meralco over a huge portion of the power industry, especially the exploitation of Meralco electric consumers.
“I pointed out to her the injurious effect of giving Meralco and other distribution companies the same right given to the National Power Corp. [NPC] to charge electric consumers for stranded losses on bilateral contracts with independent power producers,” Enrile recalled.
“I especially warned her regarding the danger to the electric consumers posed by stockholders, like the Lopezes and their associates, who have interest both in the generation and distribution side of the power industry,” he said.
His letter was received by the Office of President Arroyo in Malacañang on March 8, 2001.
He does not know whether Arroyo ever saw his letter. But one thing he knew for sure—he never had the courtesy of any reply.
True enough, shortly after the passage of Epira, Arroyo’s assurance to lower the cost of electricity in the country did not happen. Instead, the electric bills of consumers skyrocketed, to the public’s dismay and shock.
To placate the enraged public, she announced in a press conference and in a boastful display of make-believe concern for the people that she was “squeezing blood out of stone” to reduce the power purchase agreement (PPA).
She ordered the NPC to reduce its PPA from P1.25 to P0.40. This drove the NPC deeper into bankruptcy. This, as we have learned later from a report of the American Chamber of Commerce, was a very expensive publicity stunt to be paid for with taxpayers’ money. It turned out that the government had to borrow $500 million to cover the NPC-PPA reduction that Arroyo ordered.
However, for reasons only known to her, she refused to touch Meralco’s PPA from its own independent power producers. To make matters worse, Meralco arrogantly refused to honor its 10-year 3,600-megawatt power supply contract with the NPC. This was to allow Meralco to use the power output of its own independent power producers whose prices range from P5.74 to P6.26 to P7.39 per kWh, compared with the NPC’s price of P3.62 per kWh.
Meralco’s mega-franchise
Meanwhile, the House and the Senate approved, with unbelievable dispatch, the grant of a mega-franchise to Meralco. That mega-franchise covers an area of 9,337 square kilometers or 3,647.3 square miles, where a quarter of the entire population of the country live in 22 cities and 89 municipalities. The original area of Meralco, before the Lopezes sold and transferred it to the Meralco Foundation in the 1970s, was 1,018 square miles, embracing seven cities and 40 municipalities.
The mega-franchise bill breezed through Congress despite Meralco’s dismal record as a public service utility and glaring evidence of its abuses, excessive PPA charges, its sweetheart deals with its own independent power producers (IPPs), and shenanigans in its return on rate base.
We all knew, of course, that no less than the Supreme Court had ruled with finality that Meralco had been illegally passing on its own income taxes to its hapless customers. Meralco said it will go bankrupt if it refunded the billions of pesos it had exacted from the public.
That Meralco is in dire financial straits, as it claimed, while its affiliate IPPs like First Gas ended up among the country’s most profitable corporation was a classic demonstration of the evils of cross-ownership, which the Epira promised but failed to curb.
At the rate the mega-franchise bill swiftly passed through the legislature, it was reasonable for us to anticipate that the “last nail on the coffin”—the President’s signature, which will turn the bill into law, will come sooner than later.
Undoubtedly, the PPA or universal levy, or whatever name they now call it, is anti-people. It made the people pay for electricity they have not used. It made the cost of electricity exorbitant. It made the country uncompetitive in the world market. It deprived the poor and the jobless of an opportunity to find employment because the high cost of electric power will mean fewer investments and therefore, fewer jobs.
Enrile said:
“The people cannot be fooled anymore. They know now that the Epira condones the unjust, immoral and unlawful exactions against them.
“They also know now that the actions taken with much boasting by the Arroyo government supposedly to help them were mere palliatives designed to relieve primarily the political pain and distress of President Arroyo. They, likewise, know that no one but themselves will pay for the corruption, incompetence and imprudence of their national leaders.”
To be continued
To reach the writer, e-mail cecilio.arillo@gmail.com.