Arroyo said that, almost five years since it was enacted, Epira has failed to fulfill its objectives.
The law was supposed to bring down electricity rates and liquidate the debts of Napocor but this has not happened, he said.
Arroyo pointed out that Napocor had sold only five generating assets or 8.5 megawatts as of end-December 2005.
"That is a measly 0.0015 percent, meaning one and one-tenths of one percent have been sold," Arroyo said.
Under the Epira law, Arroyo noted that at least 70 percent of the total capacity of the generating assets of Napocor should have been privatized no later than three years after the law took effect.
At a total generating capacity of the Napocor generating assets of 5,625 megawatts, the 70 percent would be equivalent to 3,937 megawatts, he pointed out.
The Epira law also requires the government to directly assume a portion of the financial obligation of Napocor in an amount not to exceed P200 billion out of its P600-billion debt.
But Napocor’s debt, according to Arroyo, has now reached P800 billion while the total proceeds from the sale of the generating assets reached only P287 million.
Arroyo said Napocor’s debt has grown to such a huge level that even the sale of all the generating assets would not be able to cover for its liabilities.
Energy Secretary Raphael Lotilla, however, told the Senate during the budget hearing yesterday that the total debt of Napocor was only P572 billion, inclusive of the P200 billion assumed by the government.
Arroyo also noted that Napocor had shelled out P11 billion to P12 billion as separation pay for all of its employees even before all of the generating assets had been sold.
The separation pay clause was included in the Epira in order to protect the employees who would be laid off when the generating assets are sold.
"Where did the Napocor get the P11 billion to pay off its employees when what was sold was only P287 million? No answer. This is the scandal that must be known to the public," Arroyo said.
Epira also provided for the value-added tax zero-rating of the sales of generated power by the generating companies in order to lower the cost of electricity rates for end-users.
Arroyo recalled Congress had pushed for the "no pass-on" provision in the new expanded value-added tax reform law but this provision was defeated during the bicameral conference committee deliberations.
"So the IPPs (independent power producers) again are having a heyday. They are not taxed at all. Net result: we are paying higher electricity rates than before Epira," Arroyo claimed.
"The government should call the attention of the Secretary of Energy, the president of Napocor, president of Psalm (Power Sector Assets and Liabilities Management Corp.) and president of Transco. We’re paying higher electricity rates. This cannot go on," he added.
Arroyo branded the Epira as a "scandalous law," saying its implementation resulted in "a terrible tragedy and a terrifying failure."
The senator also called on the President to fire all of the officials involved in the sale of the Napocor’s assets for their failure to perform on their obligations.
Mike Domingo, a former World Bank consultant and convener of the group People for Empowerment and Truth, said the government faces the prospect of losing billions in potential revenues with the snail-paced disposal of its energy assets.
He scored Psalm for what he described as its "deliberate effort to slow down the privatization of the energy assets, apparently to protect the interests of big and powerful industry players."
Some economists like Astro del Castillo, managing director of the First Grade Holdings, also pointed out the delay in the implementation of an executive order creating the Philippine Strategic Oil, Gas, Resources and Power Infrastructure Office (PSOGERPIO).
Del Castillo said the delay in the implementation of EO 474 "is affecting and causing tremendous uncertainty in the whole energy industry."
He noted the concerns over the fundamentals of the power industry are causing pressure on the stock market, citing in particular the continued delay in the privatization of Napocor and other power generation assets of the government.
Del Castillo explained PSOGERPIO was precisely created to look for alternative energy and to attract investors in the promotion of renewable energy resources.
"It’s hard to catch a falling knife, the supposed medicine that can cure our energy and oil problems was somehow withdrawn for no apparent reason," Del Castillo said.
Even big transport groups such as Pasang Masda and the militant Pinag-isang Samahan ng Tsuper at Operators Nationwide (PISTON) have expressed their support for PSOGERPIO.
They claimed EO 474 was the best move taken by the government in addressing the power crisis and in promoting investment in the power and energy sector.