26 May 2008
-- Members of the Freedom from Debt Coalition reiterated today their call for a reduction of power rates and democratizing the ownership structure and management control of the country’s biggest distribution utility in favor of consumers.
“When two elephants fight, it is the grass that suffers, as the saying goes. In this power play of two elite groups vying for the control of the power sector, through the strategic control of Meralco, it is the consumer who suffers as manifested in the form of high electricity rates,” said FDC in a protest action outside the venue of Meralco’s annual shareholders’ meeting in Ortigas.
The group refers to the verbal tussle between Winston Garcia, president of Government Service Insurance System (GSIS), representing the Arroyo government, and the Lopezes, the franchise owner of MERALCO.
In a statement, FDC said that the high cost of power in the country is brought about by the confluence of many factors, including government’s flawed policies on debt, privatization, taxes, and weak regulatory regime.Reducing power rates
“To effectively reduce power rates, a menu of reforms must be effected, including the removal of VAT on power and oil; renegotiation/cancellation of Napocor’s and Meralco’s onerous IPP contracts; further rationalization of systems loss by disallowing administrative and other non-technical losses to be passed-on to consumers, among others,” the group stressed.
FDC also called on the reversal of performance base rate (PBR) methodology that departed from the previous return on rate base (RORB) methodology that only allowed 8-12 percent return on public utilities. It also called for reforms in Energy Regulatory Commission to make it a more competent and representative regulatory body. Against old oligarch and emerging cronies
While FDC wanted an end to elite control of power utilities, it is also against the rise of new type of cronyism in the industry.
“The old set-up made the power industry in the country less transparent and inherently fraudulent. But the Malacanang-backed power grab in Meralco is not a promising prospect either, with a new pack of cronies that most likely to take over,” the group said.
For FDC, fundamental reforms in Meralco cannot be made possible both under the old set-up and even after the power grab. “Not until its ownership structure is finally democratized where consumers are given the chance to exercise their rights not only as customers but also as part-owners of the utility.”
“We believe that the power industry today and in the future can be made more responsive and of better service to communities if consumers are treated not as mere captive market but partners or part-owners of the industry,” the group concluded. -30-