Napocor foot-dragging again?
Friday, May 12, 2006
Alvin Capino
Manila standard Today
There was a heave of collective discomfort in business circles recently when giant headlines indicated that the National Power Corp. is digging in on the issue of the debt which the Manila Electric Co. owes the state-owned firm.
For a while, most everyone thought the settlement of the debt was a done deal and all that Napocor and Meralco were waiting for was the imprimatur of the Energy Regulatory Commission on the settlement proposal. Earlier, the business sector and small consumers alike were eagerly waiting for the implementation of the debt settlement, which was reportedly forthcoming.
In fact, ERC chairman Rodolfo Albano himself said in a radio interview we had with him several weeks ago that a ruling by the regulatory body is expected to come out soon. Well, it looks like everybody is in for a major disappointment.
Here is a little backgrounder on the brewing conflict. About two years ago, Napocor and Meralco agreed to settle their differences against alleged unmet electricity sales quotas. That simply meant Napocor wanted to be paid for the amount of power Meralco promised to buy but bought instead from its cheaper suppliers. Two years ago, there was already a settlement agreement. At that time, Napocor was headed by Roger Murga, who retired about a year ago.
To settle the matter, Napocor and Meralco agreed that the former is to be paid some P14 billion over a period of five years. Conflict resolved but the agreement needed an ERC approval.
Everybody thought the two-year wait would be over soon. Albano has said that all that the ERC was waiting for was the position paper of the usual opposition groups.
Well, it turns out the major oppositor to the deal is the Napocor chief himself, lawyer Cyril del Callar. In classic braggadocio that threw a lot of people off their seats, Del Callar reportedly told an assembly of economic journalists recently that he is not predisposed to honor the Murga pact with Meralco now pending with the ERC. “That’s Murga, that’s not me,” he is reported to have said.
Del Callar’s position is alarming. The first question raised is, how could a covenant between two entities, which affects the lives of many Filipinos significantly, be treated so whimsically? We presume Napocor lawyers had spent a great deal of time studying and reviewing the two-year-old settlement proposal. How could Napocor so suddenly change its mind? More important, what made it change its mind?
The second question is this: Is the debt settlement back to square one? Will Napocor withdraw the settlement pact that has sat with the ERC for the past two years? If yes, would we all be waiting for many more years before the issue is finally settled?
We hope Napocor officials would appreciate the gnawing fear in the minds of businessmen and consumers following the confusing Del Callar statement. The first trigger of that fear is the resurrection of the disagreement as to how much Meralco really owes Napocor. The settlement deal before the ERC now puts the amount at P14 billion. Newspaper reports say Del Callar wants to peg the amount at P20 billion.
Napocor needs to understand why this frightens the public. We all know that the amount, whether P14 billion or P20 billion, is going to be passed on to consumers. Napocor must be more circumspect and not drop bombshell statements as if the issue does not affect us, the public.
The state-owned firm also needs to understand why the public is not faulting Meralco for incurring that so-called “unmet electricity sales quotas.” Consumers have become more aware of the mathematics of power supply.
Two recent developments, when Meralco bought more power from its generators than from Napocor, which taught us all that Meralco independent power producers sold power cheaper. Those two incidents resulted in lower power bills. So, when Meralco was not meeting Napocor’s mandatory sales quotas, consumers knew it was sourcing power from other generators. Much cheaper power. And anything that is cheaper is advantageous to the consuming public who needs a break from the burden of rising costs of almost everything.
Napocor should not expect to get public sympathy in its bid to drag the debt settlement issue and by shouting higher debt figures. Consumers already know that part of the proposed deal—call it the Murga formula—is to offset the passed debt settlement amount with cheaper power coming from Meralco IPPs. The pact would allow Meralco to buy more power from its cheaper sources. And for the public, cheaper is always better.
Both Meralco and Napocor officials were reported to have said that the debt settlement issue may have to take a back seat. We hope not. Here is one instance when we will all benefit from the resolution of a conflict we did not create.
posted by philpower @ 7:23 AM,
