Organized labor demands part-ownership of Meralco

Organized labor demanded yesterday part-ownership of the Manila Electric Co. in lieu of Meralco’s refunding P28 billion the Supreme Court has ruled it overcharged its consumers.

In a statement, the Trade Union Congress of the Philippines (TUCP) said it would be better to convert the overcharged amount into shares of stock in resolving Meralco’s predicament of repaying its debts.

Militant groups, however, pressed their demand for a lump-sum P3,500 refund for each consumer from the Lopez family-owned firm.

Meanwhile, the government said Monday it has temporarily shelved plans to sell its 10 percent stake in Meralco after a court ordered the firm to refund P28 billion to its customers.

Meralco shares plunged Monday following the court order.

"There is a fundamental change in the landscape with respect to the viability of selling Meralco shares," Finance Undersecretary Eric Recto said.ß

Members of the Buklurang Manggagawa ng Pilipinas (BMP), Partido ng Manggagawa (PM) and Sanlakas served a "disconnection notice" on the Meralco head office based on the P28 billion illegally collected by the power utility firm from its consumers since 1994.

Militant groups warned they would enforce the disconnection notice on all Meralco branches if the power distribution firm fails to comply with the Supreme Court ruling.

The Kilusang Mayo Uno (KMU) said workers will stop paying their electric bills unless Meralco makes the refund in the soonest possible time.

Bayan spokesman Renato Reyes Jr. said Meralco should be compelled to refund the lump sum "immediately and without condition."

If refunds by lump sum could not be met, Reyes said the amount could be credited to consumers on an installment basis for 10 months to one year.

Following the landmark decision of the high tribunal last Friday, militant groups have poised to launch a civil disobedience campaign to pressure the Lopez-owned power utility company to refund the amount immediately to its customers.

Former senator Juan Ponce Enrile said the current management of Meralco "should face the consequences of their misdeeds and desist from blackmailing and scaring the government, consumers and the entire country of imminent economic collapse."

Enrile said the government must now take over the Meralco management. "(The government) must reorganize its affairs, exorcise it of its anti-consumer practices and make it a truly competitive public service utility," he said.

The former opposition senator said the SC decision gives the government the opportunity to take over its operations.

"This (takeover) will ultimately serve the interests of the consumers and the business sector better," Enrile said.

One option available if Meralco cannot refund its consumers, Enrile said, is to have the refund equitized or converted into shares of stock awarded to consumers, thus allowing them to have a collective voice in the management of the power firm.

Enrile said the government, which already owns about 24 percent of Meralco, will have to receive additional equity ownership if it will end up honoring Meralco’s billion dollar loans.

"In fact, government should not allow burying Meralco further into its debt trap to pay for the refunds," gee said.

Opposition Sen. Tessie Aquino-Oreta urged Malacañang to work out a plan on how Meralco could refund the amount in the event the SC implements its ruling with finality.

Oreta also called on militant groups not to fan consumer unrest by reconsidering their weekend call for a civil disobedience campaign against Meralco.

She also appealed to her colleagues in Congress to examine "more diligently" the pending approval of the Meralco franchise and determine whether the approval of such grant would still be beneficial to consumers given the impact of the SC decision.

In a statement, Oreta has agreed to proposals for a refund on installment basis or conversion into shares of stock.

The TUCP said stock conversion would be a better option since it will save Meralco the burden of refunding the overcharged amount aside from allaying its fears of going bankrupt.

TUCP stressed bankruptcy of Meralco will bring more serious repercussions on the country’s economy and employment, considering the Social Security System (SSS) has shares of stock with the power firm.

"Many SSS members, as well as SSS itself, also have bought Meralco shares and Meralco’s bankruptcy will put workers’ hard earned money in jeopardy," the TUCP stated.

Meralco has claimed the SC ruling could cause the company’s collapse or severely impair earnings and their credit standing.

Militant groups, however, insisted Meralco can readily afford a cash refund claiming the power utility firm recently acquired P500 million worth of computers and has claimed the top spot in terms of sales among the country’s biggest corporations.

BMP vice president Romy Castillo claimed the doomsday argument made by Meralco of dire economic consequences was mere "histrionics."

"Those forecasts, we understand, are mere tantrums coming from a company that is instinctively unwilling to pay back its customers, " Castillo said.

‘Obscene profits’

For his part, Enrile claimed the Lopezes can also elect to return what he called "obscene profits" that the family-owned First Gas Power earned from the sweetheart deal with Meralco.

He said First Gas Power made a gross income of P13.1 billion, earned a net income of P4.9 billion and gave 52 percent return on equity to the Lopezes and their partners on its first year of operations.

Enrile pointed out that the Meralco refund issue presents problems and opportunities for the government. Dealing with Meralco’s depreciated financial and institutional capability and problems would be a challenge, he said.

At this point, Enrile said, Meralco should not be allowed to be created into a mega-franchise. The government should bid out the provincial franchises to generate needed revenues to bridge the huge budget deficit and create genuine competition which will result in lower electricity rates and better services, he said.

Enrile claimed the Lopezes had admitted Meralco’s finances are "precarious."

He said the SC ruling on the P28.2 billion refund will drive Meralco into bankruptcy and impair the quality of its services –compelling enough reasons why it should not be granted the franchise.

On the other hand, Meralco has announced they might pay up to as low as P8 billion from the refund judgment.

"I think it is not official. The decision (of SC) itself did not carry the amount and our computation indicates a figure of maybe as low as P8 billion and as high as P28 billion," said Meralco president Jesus Francisco.

Francisco said they have not yet officially received a copy of the decision. "Once we receive it, we will be given up to 15 days to file our motion," he said.

Using the P8 billion as basis, Francisco explained the refund will result to about 33 centavos per kilowatt-hour if done in one year.

If Meralco will be allowed to refund for three years, they will pay its customers 11 centavos a month, he said.

"Until the decision is final, I think is speculative to come up with numbers and years that will allow us to refund. We are asking our customers to be patient. We want to very careful with the numbers before making final announcements," Francisco said.

The Meralco official said they are open to suggestions on how to facilitate the refund, including proposals of giving out shares of stock to its customers.

At the same time, Francisco assured they will abide by the SC decision.

"Once the SC makes its decision, we will follow it. Whatever is decided by the regulatory commission as to be returned, and the manner of returning it, we will follow," he said.

Contingency measures

Meanwhile, President Arroyo instructed Energy Secretary Vicente Perez to map out contingency measures in the event the Meralco judgment is finally handed down.

While reiterating the executive department is prepared to implement the final ruling of the high tribunal, Press Secretary Ignacio Bunye said Mrs. Arroyo is looking out for some options the government may use if faced with the contingencies arising from the finality and implementation of the Meralco judgment.

"I’m sure at his stage, the government, especially the Energy Department, is looking for possible options," Bunye said. "As to how these options would finally take shape, we’re not at liberty at this time to make the disclosure."

Without further elaborating, Bunye only claimed the Department of Energy (DOE) will map out the strategies and recommendations before taking it up to the President and her Cabinet for approval.

"But we know that the policy-makers would be guided by national interest. First we have to follow (what) would be provided for by the Supreme Court’s final decision and then the exact manner by which this would be implemented to consider the national interest," Bunye said.

Malacañang also shot down proposals of government takeover of Meralco.

At the same time, the Palace made an appeal to militant groups to forgo plans of civil disobedience to force Meralco to pay up.

Bunye explained Meralco has the legal right to file a motion for reconsideration.

Either way, he said, the decision of the high court is not yet final and executory. "Let the Supreme Court decide. Let us not preempt them. But once the decision is final, the President, in a manner consistent with national interest, will enforce the decision (of the SC)," Bunye said.

Caloocan City Rep. Enrico Echiverri has proposed the creation of a special body which would ensure that Meralco will live up to its obligation of refunding its customers once the judgment becomes final.

Echiverri said the body will be tasked to monitor that the payments made by the power firm reach its customers.

He said the creation of a special body will be "for the nation’s best interest." - With Romel Bagares, Donnabelle Gatdula, Jerry Botial