Civil society groups want say in Meralco oversight body

Consumers and civil society groups are urging the government to allow them to be part of the oversight committee that will review the contracts between the Manila Electric Co. (Meralco) and its independent power producers (IPPs).

National Association of Electric Consumers for Reforms (Nasecore) president Pete Ilagan, at the same time, called for the government representatives in the Meralco board to take stronger roles in running the utility firm and always put the welfare of the consumers at the forefront.

"Being the majority holder of Meralco, the government should stand for its stake and not allow the Lopez group – which has smaller stake – to run the company like a wholly-owned family business," Ilagan said.

Ilagan said the government should include representatives from consumer and civil society groups in the oversight committee to allay fears of whitewash in the investigation.

"That way, the public will somehow be assured that there is no cover-up in the investigation," he said. "We hope though that Meralco is not just trying to pull our leg by forming this committee. We hope that they are not merely trying to impress upon the consuming public that they are sensitive to public opinion and that they are doing something to lessen the burden caused by the notorious purchased power adjustments (PPA)."

The oversight committee, which is headed by Land Bank president and CEO Margarito Teves and includes Union Fenoza SA’s Emilio Vincenz and former Agriculture Secretary Carlos Dominguez III as members, was formed at the initiative of the board of directors of Meralco.

Ilagan lamented that if only previous government representatives in Meralco board were vigilant and sensitive to the interests of the consumers, then the "sweetheart deals" would have been prevented.

According to Ilagan, contracts entered into by Meralco and its sister companies Quezon Power and First Gas‚ San Lorenzo and Sta. Rita had been blamed for the high PPA charges in electric bills.

He noted that in December 2002, Meralco paid P6.54 per kilowatthour (kWh) to Quezon Power, P5.41 to First Gas Sta. Rita and P4.89 to San Lorenzo. Meralco, however, is paying Napocor only P3.62 per kWh.

On the other hand, the Freedom from Debt Coalition (FDC) is urging the government to be true to its threat of a Meralco management shakedown if the company fails to review contracts with its IPPs.

"FDC recognizes the review of the Meralco contracts with its affiliated IPPs as a step towards exposing fraudulent practices of the Lopezes," FDC said.

FDC said it believes the Lopez management is using its position in Meralco to unduly enrich itself through its sweetheart deals with Lopez-owned IPPs.

"Consumers have been reeling under the oppressive rates brought about by these onerous contracts between Meralco and its affiliated IPPs. The ERC gave Meralco a 26-centavo increase in its basic rate. This rate is composed of 11.5-centavo increase as justification of Meralco systems loss, an 8.78-centavo increase as a collection of the Meralco deferred PPA ordered collected by the ERC in December 2002, a 5.46-centavo increase in the basic charge, and a 1.96-centavo universal charge for missionary electrification," FDC said.