Meralco accused: ‘Ghost deliveries’
Solon hurls new charge vs Meralco
By Norman Bordadora
Philippine Daily Inquirer
First Posted 01:13:00 05/15/2008
Filed Under: Electricity Production & Distribution, Company Information, Politics
Representative Luis Villafuerte, of Camarines Sur province, on Wednesday accused power retailer Manila Electric Co. (Meralco) of billing consumers about P13 billion in “ghost deliveries” of electricity purportedly generated by a power producer of the Lopez group, which runs Meralco.
In a privilege speech, Villafuerte said that Meralco paid First Gas Power Corp. P12.99 billion, or an average of P1.08 billion a month, from December 2000 to November 2001 for 1,000 megawatts of electricity supposedly delivered even though it had only a 300-megawatt capacity at the time.
“But the worst side of these highly scandalous transactions is that what Meralco paid for in ghost deliveries of First Gas was passed on to the electric consumers of Meralco,” said Villafuerte, a staunch ally of President Gloria Macapagal-Arroyo.
“This is one of the evils of cross-ownership between a public utility power distributor and a power generator, a compelling reason why the EPIRA [Electric Power Industry Reform Act] law should be amended to restrict and regulate cross-ownership between power generators such as First Gas and power distributors such as Meralco,” he said.
“Accordingly, what we should continue to bewail is that consumers have been the victims of such sordid transactions and a refund of the value of ghost deliveries should be demanded through appropriate legal procedures and processes.”
Meralco denied Villafuerte’s charge.
Villafuerte’s blast was the latest in a series of administration moves against the Lopez-controlled Meralco since Ms Arroyo made an impassioned plea to sympathetic businessmen two weeks ago to help her bring down electricity rates, second highest in Asia next to Japan.
Reminiscent of Marcos moves
The moves included threats by the state pension fund Government Service Insurance System (GSIS) to take over Meralco and break up its franchise area. The GSIS also said it would file fraud charges against Meralco of a P30-billion refund to consumers ordered by the Supreme Court a couple of years ago.
Meralco sympathizers said the administration’s actions against Meralco were reminiscent of the moves taken by the late dictator Ferdinand Marcos against the power utility and were a result of the hardline position taken by the Lopez-run television and radio network ABS-CBN Broadcasting Corp. on corruption allegations against Ms Arroyo.
Villafuerte led the administration’s stalwarts in Congress in quashing impeachment cases against Ms Arroyo over the 2005 “Hello, Garci” scandal, which critics said was evidence she stole the 2004 presidential election—a charge she has denied.
In his privilege speech, Villafuerte also warned the Energy Regulatory Commission (ERC) against allowing Meralco to pass on to consumers its P14-billion settlement obligation to the government’s electricity producer National Power Corp. (Napocor).
Inimical to public interest
“What is so deplorable about this attempt to pass on to consumers what Meralco owes Napocor is that it is so inimical to public interest that ERC has not outrightly rejected the petition pending before it which will again burden consumers with multi-billion charges,” Villafuerte said.
He said the Lopez group had earned money through its First Gas’ Sta. Rita plant exorbitant “tongpats” [overpricing] and that customers should be saved from such overload of charges.
He said that since First Gas supplied electricity to Meralco, with its paid-up capital of a little over P8 billion in 2000, it got back P11.448 billion in cash dividends after just 30 months.
“The Lopez group as stockholders of First Gas did not only obtain a return of 100 percent of its original paid-up capital but an extra of P3.372 billion to boot,” Villafuerte said.
He said completion and full commercial operation of the 1,000-megawatt plant contracted by First Gas was delayed “such that the First Gas Sta. Rita plant delivered to Meralco an average of 138 million kilowatt hours a month from July to November 2000.”
“This is the equivalent of only 212.9 megawatts in capacity or an equivalent output of less than 300 megawatts,” Villafuerte said.
Demonstrated capacity
“Notwithstanding the fact that First Gas had only a demonstrated capacity for the period July to November 2000 rounded to about 300 megawatts, Meralco willingly paid First Gas the capacity fees and fixed fees equivalent to 1,000 megawatts,” Villafuerte said.
He said that from December 2000 to November 2001, a period of 12 months, Meralco paid First Gas P12.99 billion or an average of P1.08 billion a month “even if First Gas did not deliver to Meralco the equivalent kilowatt hour power that Meralco paid for.”
Meralco contracted to buy 3,600 megawatts of power from Napocor from 1995 to 2004. The Lopez-controlled Meralco, however, entered the power generation business of its own in the latter part of 2001.
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