EPIRA to take beating in Napocor-Meralco probe--Sen. Arroyo
More probes on public franchises eyed
By Gil C. Cabacungan Jr.
Philippine Daily Inquirer
First Posted 22:29:00 05/11/2008
MANILA, Philippines--President Gloria Macapagal-Arroyo’s Electric Power Industry Reform Act of 2001 (EPIRA) would most likely be the first casualty of the Joint Power Commission (Powercom) investigation beginning on Monday, Sen. Joker Arroyo said Sunday.
Arroyo said EPIRA was certain to take the blame for the high electricity bills that some legislators had said were the fault of either the National Power Corp. (Napocor) or the Manila Electric Co. (Meralco), or both.
While he found the Powercom hearing as long overdue, Arroyo warned other power utilities and telecommunication companies that this was just the first in a series of congressional inquiries into the "excessive profits" of franchise utilities in the country.
"The hearing is a good way to know why power rates are high. The only question is whether this will lead to lower electricity rates because if it doesn't, I don't know what this exercise is for," said Arroyo in a radio interview with dzBB radio.
While media has been replete with fault-finding between Napocor and Meralco on the high power rates, Arroyo said that the questions would ultimately lead to the EPIRA law, which after seven years has yet to achieve any of its declared objectives to reduce power rates and cut Napocor's loans.
"Our power rates are higher now than when EPIRA started, Napocor's loans are bigger now than in 2001. EPIRA is the first reform made by the President. They got [then Energy Secretary Isidro] Camacho, who was appointed by Gloria, to push the bill in Congress," said Arroyo, who was among the few who rejected it.
Arroyo said one of EPIRA’s glaring failures was the sloth-like pace of Napocor's privatization even after the government had absorbed hundreds of billions of pesos worth of Napocor loans and paid off P12 billion in retirement funds to its employees.
The administration senator noted that only 43 percent of Napocor operations were in private hands versus the 70-percent target.
"Had we privatized as scheduled, we would not be paying more loans [40 percent of government loans are owed by Napocor] and this would have been a big help to consumers," said Arroyo.
Arroyo said the EPIRA likewise relaxed the way Meralco computed its allowable returns on its investments. "The EPIRA destroyed this [system of capping Meralco's profits], it is now based on performance, which is elastic," said Arroyo.
But Arroyo said the probe on Napocor and Meralco would lay the ground for Congress to pry into the "excessive profits" of other franchise holders like other power utilities and mobile phone providers.
"Whatever will happen with Meralco, this will spill over to other franchises. They are the biggest money earners," said Arroyo who maintained that corporations operating on state franchises should have limits on what they could earn from a virtual monopoly.
In Baguio City, Sen. Loren Legarda said EPIRA failed to bring down power rates and should be amended, pointing out that the Philippines was the second country in Asia with the highest electricity rates.
Various sectors in the power industry have opposed EPIRA because one of its provisions is to pass on to consumers the debts accumulated by Napocor, which are reflected on monthly bills as the "universal charge."
Legarda said many legislators were working to reverse EPIRA’s contentious policies by pushing extreme but pro-consumer solutions.
With a report from Vincent Cabreza, Inquirer Northern Luzon
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