Congress inquiry won’t  lower electricity rates

After Congress’ daylong hearing Monday on electricity, Malacañang officials twittered that power rates would go down thence. But why do we get the feeling it won’t?

 Maybe it’s because the Arroyo admin’s motive was too obvious. For one, the inquisition co-chaired by a presidential ally and a son bashed only Meralco. The private distributor may well have deserved the thumping — for self-dealing with subsidiaries and excessive executive perks — but it was lacking. Sparing state-owned Napocor from scrutiny, probers ensured they would only dig shallow. Untouched were Napocor’s frequent emergency coal purchases — overpriced by billions of pesos — from suppliers linked to the admin. To avoid exposure of this awkward cause of soaring electricity rates, the inquiry expectedly will end soon.

 Too, politicking marks the admin “fight” to lower rates. This shows in the Solicitor General’s belated opposition to the 2003 write-off by Napocor of Meralco’s P37.4-billion debt. The Sol-Gen brands the deal “contrary to law”, meaning criminal; and “grossly disadvantageous to the government”, meaning corrupt. Yet no charges are made against the Napocor directors, mostly cabinet members then and now, who approved the write-off. There are no lawsuits too against the eleven Meralco directors — four of whom were presidential appointees to state-administered funds and banks that own 33 percent. The Sol-Gen’s stand looks more like calibrated pressure on the Lopez clan that controls 33.4 percent of Meralco. Could it be why two ex-bankers close to a Palace biggie are now angling to sit in the Meralco board in case the Lopezes are cut down?

Meanwhile, President Gloria Arroyo is ordering Napocor to halve its pass-on price of generated electricity to Meralco. It sounds pro-poor, but not when recalling a similar directive to Napocor in 2002 to cut its Luzon price by 80¢ per kilowatt-hour and then cap it at 40¢. Napocor lost P1.2 trillion in the three years to 2004, necessitating the levying of the hated 12-percent value-added tax to cover the fiscal gap. Even taxpayers in Visayas-Mindanao, who never felt the cutbacks, had to help save Napocor from ruin. Industry insiders aver that the recent Napocor price rigging at the Wholesale Electricity Spot Market was also to offset the losses.

The admin benefits too much from power pricing that real reforms cannot be expected.

One such benefit comes from debatable taxes. During the Congress hearing, admin hit men flayed Meralco for passing onto customers systems losses (due to electricity theft) of 9.65 percent, when the legal cap is only 9.5. They were silent, however, on the admin’s exaction of 12-percent VAT on the same systems loss. So the higher the systems loss Meralco bills, the better for the admin?

Then there’s the tax on natural gas, which fuels 23 percent of power produced in Luzon. Gas from Malampaya well in Palawan is taxed ten times more than imported coal; that is, effectively P1.70 gas royalty versus P0.17 coal tax per kilowatt-hour. Not only is it ridiculous for the admin to tax relatively cleaner indigenous gas more than imported dirty coal, it also defies common practice. Other countries impose royalty on gas or oil only when exported, never when consumed domestically. Even RP minerals when exported are levied only 2-3 percent.

Where do the taxes go? Theoretically, to basic services for the poor. But in the electricity sector, half of Meralco’s four million customers enjoy admin-imposed lifeline rates. Meaning, the other half subsidizes the urban-poor in behalf of the admin, while promoting city migration and squatting.

Of course, taxes go to admin projects and loans. But with the way Malacañang conceals the details of such projects and loans, as in the NBN-ZTE deal, there’s bound to be “tong-pats” (kickbacks).

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 My recent pieces on the lack of x-ray machines at Philippine General Hospital touched a kind heart. Sir Edward Artis of Makati-based non-profit Knightsbridge International swiftly hooked up with PGH Medical Foundation to donate two units from America. Pending the shipment’s arrival, Artis gave hospital equipment he has on hand: two rolling gurneys, two ceiling-mounted surgical lights, two wheelchairs, and several boxes of medical supplies. Dr. Gregorio Alvior, foundation president, along with Dr. Rodney Dofitas and Joselito Tetangco, received the donations last week.

Alvior says “at least 640,000 charity patients walk into PGH each year for badly needed medical help.” But the country’s premier tertiary hospital sorely lacks funds. It needs P1 million a month to meet the ever-increasing demand for medical services. The Foundation helps raise the shortage that the government cannot provide. Donors to PGH may reach him at [email protected]. They may also call Dr. Michael Tee, 0917-8336398; Office of the Director, PGH, (02) 5252584, (02) 5242221 fax.

Donors to other hospitals and causes may contact Sir Edward Artis at P.O. Box 2354 Makati Central 1263, or [email protected].

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E-mail: [email protected]