QUEEN’S GAMBIT

by Bernie Lopez

GMA recently threw the apple of discord by directing the DTI to appeal to the ERC for lower Napocor rates for Meralco, a seemingly creative entrapment to force Meralco to lower its rates to consumers correspondingly. The gambit may work in exposing Meralco’s excuse for a scandalous 12% increase in generation rate in a single month.

 

Observers say it is a GMA move to take over Meralco, using the GSIS as the rook. But who is saying there is a take over? Is it the Meralco boys, to make GMA look like the wolf? Or is there really a takeover, hinted by GSIS head Winston Garcia wanting ‘transparency’ in Meralco’s books? The take over theory seems flimsy to me. Why and why now? In my opinion, it is really the gall of this giant utility to increase rates arbitrarily and unilaterally which has angered both government and the general public. In other words, sobra na.

 

Pete Ilagan, the electric consumer advocate from NASECORE, updated me on this raging issue. He explains that Meralco raised the generation rate from P4.38 in March to P4.90 in April, a scandalous 52 centavos increase. Pete explains that a centavo increase translates in an increase in Meralco revenue of about P270 million. Multiply this by 52 and you get a staggering P13.5 billion, all in a single month.

 

Meralco says the increase was due to corresponding rate increase at WESM. But Meralco buys only 8.9% of its power from WESM, 35% from Napocor, and the rest from its own Independent Power Producers (IPPs), Sta. Rita, Quezon, etal. So why the sudden 52-centavo or 12% increase in a single month?

 

It is against the law to buy power higher than the Napocor rate, more so if you buy from yourself and charge the high rates on consumers. This is not only illegal, it is immoral as it victimizes the general public. Is this is why Meralco tries to keep secret the price it buys power from itself, namely the same Lopez-controlled IPPs?

 

But it comes out in the papers anyway. A columnist claims Meralco buys from itself at P5.30 which is higher than the Napocor rate of P4.38 (April rate). If this figure is correct, then Meralco must be penalized for passing on such illegal rates to consumers.

 

If Meralco has been illegally buying power from itself for many months now, why is the Electric Regulatory Commission (ERC) not able to stop it? And why is Meralco permitted to unilaterally increase its rate arbitrarily without giving numbers to justify it? Pete says that Meralco says it is simply based on 'pass-on cost'. This means, whatever the cost of power, Meralco simply passes it on to users without adding or subtracting. This explanation is not enough. Meralco must give exact numbers. Instead of taking the side of the queen, ERC Director Albano questioned DTI’s authority to request for the lowering of rates. Is there an ERC-Meralco partnership that is trying to defy the queen?

 

The Queen's Gambit was a directive to Napocor to lower the generation rate charged to Meralco to P4.11, the average rate for Electric Cooperatives. If this is done, then the generation rate charged by Meralco to consumers should also go lower correspondingly and proportionately. Meralco is in dilemma if it still increases its rates after the directive, or if it lowers but not proportionately. Remember it is a 'pass on cost'. It has to justify its changes in generation rate exactly and quantitatively. GMA is Ahab and Meralco is Moby Dick.

 

But it is not as simple as that. The P4.11 rate charged to Electric Cooperatives is an average rate. The rate can actually swing like a pendulum from about P6.00 at peak hours to P1.87 at non-peak hours. So it is complex in the sense that volume of purchase at specific times involves different rates. But it is impossible not to have an exact gauge on actual charges. So we do not have to talk of averages but of actual total charges, to determine exactly at what rate Meralco purchased and at what volume.

 

Another question is - is Meralco intentionally buying at high peak prices from its own IPPs to unduly up its profits by passing the cost to consumers, while buying at non-peak from Meralco or WESM? Pete and Freedom from Debt Coalition (FDC) should look into Meralco’s books.

 

There is a scheduled critical Tuesday dialogue that Pete and FDC requested from the ERC with players like PSALM, TRANSCO, WESM, and Napocor to attend and air their sides. Unfortunately, it is too late to include the results of that meeting in today’s column. So let us leave that for next week.

 

One last point. Homeowners are entitled to a 30% discount if the power comes from Napocor. Since Meralco buys 35% of its power from Napocor, there should be a 30% of 35% or about 4.3 centavos based on the March rate of P4.11. Is this discount being given? It seems this is not being reflected on our electric bills.

 

Meralco has two sweethearts, Sta. Rita and Quezon, not to mention future IPPs it will have. This is not only incest, it is bigamy.

beteljuice7@gmail.com