Cyril’s P20-billion scare

There was every reason to thank the Energy Regulatory Commission (ERC) last week.

For a while, power consumers all over the country thought we were headed for another round of the now-familiar National Power Corp. (Napocor) generation rate hike. Actually, the ERC did approve the Napocor bid to increase its rate by an average of 15 centavos per kilowatt hour for Luzon, Visayas and Mindanao. The usual excuse, of course, is that the state-owned power firm needed the raise to "recover" costs of fuel, and non-generation related costs like foreign exchange risks in debt servicing.

Fortunately, ERC decided to shelve the approval of the Napocor rate hike due to some pending issues before the Supreme Court. A collective sigh of relief nationwide ensued.

There is a joke circulating in coffee shops about power rate hikes. The yarn is that Napocor’s unending rate hikes have brought about a "battered wife syndrome" across the nation. The syndrome of course refers to what happens to a woman who is consistenly subjected to physical and psychological terror by an oppressive spouse. After some time, the battered woman becomes resigned to her fate and stops all forms of resistance.

The "battering" began as early as two years ago when the nation accepted two successive Napocor rate hikes, thanks to the sweet-talking former Energy Secretary Vince Perez. We were, of course, "battered" twice since we also agreed to allow half a billion pesos in Napocor debts to be absorbed by the National Government.

The first two major rate increases "battered" direct power consumers. The second, the absorption by the National Government of the Napocor debt, "battered" even non-power consumers since that would be shouldered by all taxpayers, whether or not you benefit from what Napocor produces.

So there are no more major outcries against the ongoing "battering", not even from the so-called National Association of Electricity Consumers or Nasecore which appears to be more interested in the power distribution business rather than in opposing Napocor rate hikes.

Nobody is marching on the streets to protest the hikes. Everyone appears resigned to the reality that Napocor will be a burden to the Filipino people for a long, long period of time.

Consistent with the "battering", Napocor seems poised to add one more psychological blow, this time exclusively to power consumers in the Meralco franchise area. Several weeks ago, Napocor president Cyril del Callar came up with what coffee shop habitués now call, Cyril’s P20-billion scare.

What’s Cyril’s scare all about? It will be recalled that for a long time, Napocor and Meralco were at each other’s throat concerning the latter’s "debt" arising from so-called "unmet electricity sales quotas". In layman’s terms: Napocor and Meralco had a 10-year supply contract which ended a few years ago. During that period, both parties agreed on certain power purchase levels. When the contract ended, Napocor said Meralco did not buy all the power that the latter promised it would. Therefore the so-called unmet electricity sales quotas.

Now, a promise is a promise and Meralco agreed to face up to its unmet purchase commitments. So, two years ago, both Napocor and Meralco agreed to bury the hatchet and settle the unmet sales quotas at the cost of P14.3 billion. To be passed on to Meralco customers, of course.

Two years ago, that settlement was a welcome deal. Okay, we, Meralco customers will absorb that P14.3 billion that Napocor wants to collect. But in that deal signed by both parties two years ago, there was a provision that Meralco can source more power from other independent power producers which – experience have shown us many, many times – sell power cheaper than Napocor. Ergo, the resulting lower generation costs from other power suppliers would somehow cushion our absorption of the big bucks Napocor wants.

The Napocor president at the time of the settlement was Roger Murga who has recently retired. And the man at the helm of Napocor now is Cyril del Callar.

Cyril has had major impact in the power sector since he took over the reins of Napocor. Among them is the brisk direct connect business which observers see as a double-edged sword: while it is good for Napocor bottomline, it may be a disincentive to privatization.

The other major mark that Cyril is best remembered is the classic statement he dished out at a power forum to the effect that he won’t have anything to do with the settlement deal with Meralco that was signed by his predecessor.

Media people covering that event reported Cyril as saying that, as far as he is concerned, Meralco owes Napocor a whopping P20 billion, and not P14.3 billion as agreed two years ago.

The statement certainly sent the customers in the Meralco franchise area in near-panic. What Del Callar apparently failed to realize is that we all shudder in fear every time he flaunts his stance that the debt is P20 billion and not P14.3 billion as has been agreed upon and recorded in the ERC.

This is because we all know that what Napocor wants to collect, we will be paying. And since we have no choice nor say on this matter, we would rather pay P14.3 billion than P20 billion.

No one can fathom Cyril’s penchant for scaring us all. But then that’s the way the "battered wife syndrome" works.

We just hope Cyril does not talk about his P20 billion "collectible" in a manner that is so insensitive to those who would actually be shouldering that item, meaning, we power consumers. We are already so battered by Napocor’s never-ending rate hikes that we hardly have the strength nor will to even whimper.

We also hope Cyril is not entertaining the fantasy that by saber-rattling on his P20 billion collectible, we will go up in arms against Meralco. We are not about to fault the power distributor for that unmet sales quota. What we do know is that when Meralco was not buying from Napocor, it was selling cheaper power to us.

That is based on experience. Even the constant battering would not deprive us of the wisdom of experience.

Not so hidden agenda

If there is one thing that the Legal Management Council of the Philippines (the country’s only association of corporate lawyers) is truly proud of, it is its impressive roster of past presidents. The list, which includes Enrique Garido, Leonardo Gutierrez, Bayani Faylona, Josue Gustilo, Ricardo Cruz Jr., Fidel Sandoval, Antonio Infante, Avelino Cruz, Jose Adriano, Enrique Perez, Jose Bengzon Jr., Rosito Manhit, Florecita Flores, Digno Asuncion, Renato Cayetano, Oscar Ventanilla, Gregorio Puruganan, Custodio Parlade, Abad Olan, Rodolfo dela Rosa, Ismael Khan Jr., Rafael Abiera, Vicente Torres, Cirilo Tolosa, Primo Agasaoay, Eliseo Alampay, Rodolfo Publico, Eva Policar-Bautista, Manuel Ortega, Renato Fernandez, Quirino Marquinez, Rogelio Nicandro, Aurora Santiago, Sabino Acut, Alonzo Ancheta, Elena Lim, Wilfredo Chato, Ariel Abonal, and of course, incumbent president Gafar Lutian, is virtually a who’s who in the Philippine legal profession. No less than Supreme Court Chief Justice Artemio Panganiban was a director of LMCP. During the recent induction of the new set of LMCP officers led by Junie Lutian, Legally Banned, the band of lawyers from Quisumbing, Torres, Evangelista, entertained the crowd. And of course, the presence of the past presidents who were honored during the occasion also provided additional spark to that glorious evening.

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