'NPC discrepancies due to corruption, negligence'

CEBU, Philippines - A power consumer group yesterday said that the “inefficiency” in the management of the National Power Corporation may be due to graft and corruption and neglect in the safeguard of its properties.

Romeo Gerochi, legal counsel of the Freedom from Debt Coalition in Iloilo, said that these could be the reasons why the Commission on Audit found a lot of discrepancies in the financial statements of NPC. 

Based on NPC’s 2007 Annual Report, FDC said the utility declared that it “closed the year with an unprecedented net income of P136.07 billion,” the highest in NPC’s 71-year corporate history.

Gerochi said NPC’s total current asset is P207 billion against its total current liability of P171.6 billion.

“You see, Napocor is very liquid. How can they claim that they are losing?” Gerochi said.

FDC has already filed its petition for intervention and argued that NPC’s proposed increase from 8 percent to 12 percent Return on Rate Base (RORB) is vague, whimsical, and without factual and legal basis. 

NPC alleged that the RORB increase is meant “to alleviate the financial burden of applicants in providing customers incentives such as the thirty centavos mandated rate reduction from NPC rates.

“But FDC call this “absurd” and a “bigay-bawi” scheme where consumers are made to suffer for the very incentives granted to them by law. 

FDC also argued that the other reasons offered by NPC to increase its RORB – for it to comply with loans from foreign creditors – is equally preposterous because NPC is already granted the benefit of full cost recovery for its loan payments to foreign creditors through the Generation Rate Adjustment Mechanism and the Incremental Currency Exchange Rate Adjustment.

NPC also admitted in its application that more than 70 percent of its generation assets has already been sold and privatized, which according to FDC should lead to the narrowing of its rate base, and eventually to the lowering of electricity rates.

Representatives from local government units in the Visayas, cause-oriented groups and electric cooperatives have challenged the petition for rates increase of NPC as the Energy Regulatory Commission held public hearings in Cebu that ended yesterday.

Last February 16, ERC granted a provisional authority to NPC to increase rates by P0.4682 per kilowatt-hour in Luzon, P1.1460 per kWh in Visayas, and P0.7147 in Mindanao. Lito Vasquez, FDC-Cebu secretary general said that NPC is raking in billions from its present rates yet it demands billions more in the middle of a raging worldwide economic crisis.

ERC, however, said that the provisional rates may still change depending on the outcome of the hearings on the rate application and the evidences submitted by applicants. 

It pointed out that if it turns out in the final evaluation by ERC that NPC and Power Sector Assets and Liabilities Management are not entitled to the adjustments that were provisionally authorized, they are obligated to refund any excess in recoveries.  — Mitchelle L. Palaubsanon/BRP   (THE FREEMAN)