In one of the most vigorously worded polemics ever heard from the evenly-tempered head man of the Lopez conglomerate, occasioned by the holding of the 41st stockholders meeting of First Philippine Holdings Corp. (FPHC), Oscar Lopez, FPHC chairman, laid to rest three key issues hurled specifically against the Lopez’s management of the Manila Electric Co. (Meralco).
First Holdings controls 28-percent equity of Meralco.
First, Meralco for the past 40 years "has actually kept a very tight rein on the components of the power rate within its control," Lopez declared, refuting the charge that Meralco was "rapacious." He pointed out that decisions and reversal of decisions by regulators like the Energy Regulatory Board (now Commission) and by the Supreme Court were not within Meralco’s control.
Second, Meralco’s contract to buy power from the Santa Rita and San Lorezno gas-powered plants could never have been a "sweetheart deal." Why? Because Meralco was precisely called upon, in 1994, by two energy secretaries, first by Delfin Lazaro and then by Francisco Viray, to provide "the market" to the 1,500 megawatts from natural gas-fired plants.
The plants, to be fueled by natural gas coming from the Camago-Malampaya field project in Palawan, would be key to making viable such an ambitious $4.8-billion project by Occidental Petroleum and Shell. Lopez thus pointed out: "Meralco’s participation as a buyer of the gas was an integral and essential component of the development of Malampaya without which our country’s first commercial natural gas field would not have been developed."
The third charge – that the Lopezes "have milked" Meralco – was "the easiest accusation to discuss," said the FPHC chairman, adding that it was "the most absurd and ludicrous charge to start with."
He pointed out that Meralco "is scrutinized by the regulators, by various interest and consumer groups, by the SEC (Securities and Exchange Commission), by a specially appointed watchdog committee, and by directors on its board representing equity held by government agencies."
On Meralco’s so-called overcharging, Lopez took detractors to task, pointing at "politicians whose scruples and motives are less than noble" and have been busy throwing a smokescreen, and therefore miss historical and contemporary facts.
He explained that Meralco’s basic distribution charge today is 82 centavos. Since 1991, the utility firm "has effectively been allowed to increase its rate by only 1.7 centavos. (This is actually the difference between the provisional increase of 18.4 centavos awarded in 1994 and rollback of 16.7 centavos in 1998.)
"Meralco had sought an additional 30-centavo increase, equivalent to a 28-percent increase in its basic distribution charge," he said. "Does that sound rapacious? I think not," he argued.
Compare this, he said, with the hefty rate increases of other modern-day conveniences: the monthly cost of telephone lines rose by 145 percent and public utility bus tariffs by 126 percent. On top of that, he added, our exchange rate moved from P27.65 to close to P53 to a dollar (a 92-percent rise); the consumer price index by 70.2 percent. Likewise the cost of newspapers rose by 300 percent since that time.
The Lopez Group head turned to a more fundamental issue – the role of the state power firm. "What Napocor is charging today is not the true price of power, derived from the true cost at which it generates power."
"The problem is we don’t know what those true costs are, because there is no transparency in the process," he said, adding that, while "private power producers are compelled to open their operations to full scrutiny and to detail their costs and efficiencies even at the contract negotiation stage, Napocor is not required to show its inner workings. Yet, at the end of every year, a massive loss (of Napocor) is reported."
Lopez disclosed that Napocor has become a burden to the national treasury, with a mounting debt that now stands at P53 billion.
The Lopez patriarch concluded: "As electrical consumers and as individuals who have invested part of your life savings directly or indirectly, in Meralco and First Holdings, you owe it to yourselves to know what is actually happening to that hard-earned money and to protect it."
"It is your right to demand a proper accounting not only from us as corporations and utilities, but also from your government and instrumentalities like Napocor," he added.