Meralco past, present, and future

You can catch yesterday’s episode of The Explainer over at YouTube. Something went wrong with the equipment so we had to deviate from the usual format. The original script will eventually appear on The Explainer blog.

Inquirer.net’s caption for the photo at left: A new witness provides this picture of President Gloria Macapagal-Arroyo and her husband Jose Miguel “Mike” Arroyo that he says was taken during a golf game at the Shenzhen Golf Club in Shenzhen, China on Nov. 2, 2006 followed by lunch with ZTE officials at the ZTE headquarters.

Old witness, now under oath: Lozada tells court Mike Defensor asked him to deny NBN scam . New witness, not yet under oath, but armed with a picture: New NBN-ZTE witness surfaces: Says Arroyo visited ZTE execs at headquarters. Same-same official response: Palace dares witness: So sue Arroyo in court.

Yesterday, I linked to two pre-martial law articles concerning Meralco that appeared in the Philippines Free Press (see Malacañang vs. Meralco and Political War and Martial Law? both circa 1971). This then brought up the question of the Marcos takeover of Meralco and the subsequent nullification of that takeover after the Edsa Revolution.

Senator Juan Ponce Enrile made fighting Meralco his campaign platform, and his latest broadside (see ‘Govt still owns Meralco’: Sen. Enrile says government can retake company) should be viewed in that context (as well as a residual loyalty to the propaganda justifying martial law and the conduct of the Marcos administration). It’s worth noting that Oscar Lopez published a full-page open letter addressed to the President in the papers today (see Lift taxes to lower power rates, Lopez tells Arroyo ). Previously, Lopez and Enrile exchanged open letters, although the Lopez one is no longer available on line.

Enrile’s assertion that the government can claim ownership of Meralco is distilled in an open letter dated October 4, 2002 and he provides links to supporting documents in an earlier open letter dated September 25, 2002. Of interest, as well, is a link to G.R. No. 95197. September 30, 1991, the Supreme Court’s decision to uphold the PCGG’s decision to lift its sequestration of Meralco shares, which I assume ratified the resumption of Lopez control over Meralco: and points to the ownership question having been determined in court.

What’s interesting is how, as Manuel Buencamino puts it, the government’s having a hard time mobilizing public support for what should be a cut-and-dried consumer interest case:

The Lopezes should have been an easy mark for a corrupt administration that is trying to look like it cares for the welfare of the masses. Unfortunately, the administration went into overkill. I guess Mrs. Arroyo didn’t think Winston Garcia could do it on his own, so she marshaled all her forces against the Lopezes. She even went to the extent of asking businessmen and the masses for help. Now, the Lopezes are underdogs.

Imagine that. One of the wealthiest, most powerful families in this class-warfare conscious society of ours has the sympathy of the public. Only the geniuses of Malacañang could have pulled off such a stunt.

Now, a public that has bitched but paid electric bills it never understood is learning that Manila Electric Co.’s (Meralco) portion of the bill is only for distribution of power. The bulk of the bill it pays goes to power generators like National Power Corp., transmission companies like you-know-whose, as well as value-added tax. So now, the public wants to know, why pick on Meralco when it’s the government that’s bleeding the public dry?

In Monday’s joint congressional committee hearing on the high cost of electricity, no one could give a straight answer to the question why electricity is so expensive and what can be done to bring down its cost.

Bong Austero bewails everyone’s inability to just get along and laments Congress getting into the act, and says a more problem-solving attitude behooves everyone concerned:

It doesn’t help, of course, that government has also been unclear about what its real agenda is – what it really wants and how, or up to what extent, it is willing to go to get what it wants on the issue around electricity rates. To complicate things further, people in government continue to sing in discordant voices. Is this really simply about lowering electricity rates, or is there more than meets the eye? Is a takeover of Meralco part of the plan? Is GSIS really acting on its own accord, or is the government behind the saber rattling? No one knows because no one is giving straight answers, which leads many people to suspect that it’s all a bluff.

It is also very tempting to picture Meralco as the proverbial big bad (greedy) wolf in this whole scheme of things. It is a profitable business enterprise, although, to be frank about it, not as profitable as it should be given its assets. It also happens to be one of the leaders in the industry in terms of compensation and benefits –  Meralco is renowned for having the lowest employee turnover rates in the country as hardly anyone resigns from the power firm because of its long history as a good provider for its employees.

But is Meralco passing on charges to its consumers in violation of legal and ethical rules? This is a valid question that Meralco refuses to answer in a straightforward manner. Meralco is preventing GSIS, which, together with other government agencies, owns 33 percent of the firm from taking a look at its books.

The truth is that Meralco has a lot of explaining to do to its stakeholders. It is benefiting from the generally low credibility of this administration, but there is a limit to how much it can shield itself by conjuring legal gobbledygook. At the end of the day, Meralco is answerable to consumers as a public corporation that thrives on its image as a responsible corporate citizen. It must aspire to be honorable even if others are not; even if the government is not.

All this talk about a takeover is really smoke-and-mirrors. Anyone out there who thinks a takeover is a viable option must be extremely naïve. The Lopezes may be sick and tired of all the regulatory restrictions that come with managing a public utility company, but aside from the fact that Meralco is a crown jewel in the family business empire, it also happens to be a firm that is closely tied in to the family’s history and legacy. Meralco is not just a business venture for the Lopezes. And anyone who thinks that the government can successfully conduct a corporate raid at a time when people – particularly businessmen – are edgy is out of his mind. It’s not going to happen.

So let’s keep the discussion focused on what is real, doable and relevant: Keeping electricity rates down. It’s an issue that is valid and which requires effective responses – both short-term and long-term.

I haven’t seen the hearings although one colleague ventured the opinion that it was a relief to see the Senators being relatively sober and buckling down to work for a change -and how the handling by Rep. Mikey Arroyo of his committee was not exactly inspiring. My colleague said that Meralco was tripped up by the revelation that it passes on its own electricity costs (i.e., the power consumption of Meralco as a corporation) to consumers; but that the larger revelation was that at every step of the generation and transmission process, the government keeps stepping and levying taxes, which bloats consumers’ bills.

For additional information, The Business Mirror‘s published 10 reasons why electricity bills are high, a primer prepared by the Freedom from Debt Coalition. Basically, companies that generate power and distribute it are in a cozy relationship, thanks to Ramos-era emergency legislation, but the result is this:

We pay for capacity we don’t use, and this is such a heavy burden on consumers that we economize on our use of electricity even further. However, the less we consume of electricity, the more we have to pay of unused capacity. This is a vicious cycle similar to a debt trap. Industries cannot survive such a setup. Poor consumers, even less so.

A vicious cycle indeed!

As At Midfield points out, what’s pissed off the public most, is having to pay for electricity they don’t consume.

In other news, the Inquirer editorial looks at the President and Esperon in Reward and punishment.

Overseas, in A Drastic Remedy Anne Applebaum lays out the case for international intervention in Burma. And in Dynasties gone nasty , Dan Kennedy (no relation to the subjects of his piece) looks at the parting of ways between the Kennedys and the Clintons.

Blogger-turned MP Jeff Ooi points to lobbying, Malaysian-style, in The Lobby Lobbyists.

Hans Kung, the noted theologian, asks whether lying should be considered an integral part of politics in The truth, the whole truth and nothing but the truth. Arianna Huffington engages in Probing a Political Paradox: Why the Discredited Right Still Sets the Agenda and Dominates the Debate.

In the blogopshere, James Fallows on Earthquake accounts from foreigners in Chengdu. See Slate’s Disaster in China for a roundup of how the online world came to grips with the news. RConversation appeals to bloggers to donate to earthquake relief and discusses her sources of online information on the China quake. And since 5.3 magnitude quake jolts Isabela , it’s time to review Philippines Earthquake Information.

fritzified.com looks at the proliferation of rice varieties in Thailand: aside from their advances in rice varieties, the manner in which Thai agriculture’s advanced by leaps and bounds points to the lack of innovation and imagination here at home, where coconut milk we buy locally comes from Thailand (which also edged us out in the case of products such as tamarinds, jackfruits, and a non-stinky variety of
Durian).