GOV’T KNOWS BETTER?: There is no need for the government to take over the Manila Electric Co. (Meralco) if the purpose is merely to lower electricity rates to more reasonable levels and make sure the utility firm is managed properly.

Government takeover was proposed the other day by some congressmen who must have been fed up with soaring power rates and who must have been left out when Meralco, huh, explained the situation to selected lawmakers.

The government already has its own people right there with the Meralco board and who are therefore in a position to influence policy. With its 25-percent share in equity, the government holds three of the 11 board seats.

The government-nominated directors are Carlos Dominguez, Garry Teves, and O. V. Espiritu. If these gentlemen are asleep, maybe President Gloria Macapagal Arroyo should change them (but in fairness to them, we think they are conscientiously carrying out their instructions).

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MARCHING BACKWARDS: Faced with a mountain of data on dead and dying public corporations, we shudder at the thought of government taking over the premier power distribution firm in the country. Things would get worse with Meralco in government hands.

Just think of the giant National Power Corp. When it was still being professionally run as private business, it was raking in oodles of profits and electricity rates were reasonable. But when the politicians started to poke their sticky fingers into it, it blew faster than a busted fuse.

Meralco is not exactly a model utility firm and the power rates it passes on to consumers are just too much, but we think it would be a more grievous mistake at this point to turn it over to the government.

Bloated rates are not a problem peculiar to Meralco. In fact, the company is itself a victim of the inefficient system that relies heavily on too many IPPs (independent power producers) holding onerous contracts allowing them to collect payments (such as PPA or purchased power adjustments) for electricity they do not even produce or deliver.

Here we are on the road to privatizing Napocor, and two stray members of Congress want us to march backwards to government control! Will Meralco please hurry and, huh. enlighten the duo?

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READ THIS AND CRY: Here we are high up in the clouds talking of billions, of PPA, IPP, the Napocor, the Meralco… but how is it like in the countryside where the poor are being zapped by electricity that’s even more expensive than that in the nation’s power capital?

We have absurd situations where communities hosting huge power plants serving national requirements remain poor and shackled to electricity rates higher than the national average. How do we correct this injustice?

Reader Sonny E. Pulgar of the Sentro ng Agapay Legal sa Quezon wants to report (“make sumbong“) to fellow consumers in the nation’s capital about their plight in Quezon. Please listen to him:

“Quezon province hosts two coal-fired power plants, one in Mauban (the Quezon Power Ltd.) and another in Pagbilao (the Hopewell Power Plant, now operated by Mirant Philippines Corp., the most profitable power venture hereabouts with a bottom line of P8.5 billion in 2000).

“With these power behemoths combined, Quezon province alone produces 1,200 megawatts of electric power. They have invested a total of $2 billion at present value.

“You would think that with that kind of investment our backward province is on the verge of economic redemption from the real property taxes alone. Makati City comes to mind where one hotel alone (New World Hotel, for example) pays an annual realty tax of P50 million. Multiplied by a hundred more buildings spread all over gives you an idea that makes the city the envy of all LGUs, for after all realty taxes are retained by them.

“You would ask — are these power plants in Quezon paying real estate taxes? In spite of the fact that their ears are oozing with profits, these power giants as IPPs and with their secured PPAs, are NOT paying realty taxes to the host Quezon province.

“Quezon Power (QPL) made its own estimate of what it is going to pay Quezon province instead of the correct assessment made by the Mauban assessor. QPL went to court instead of going to the local board of assessment appeals as provided for by the Local Government Code.

“QPL is asking for an injunction from the local court to enjoin the province from collecting, levying, and auctioning the assets of QPL for non-payment of taxes. As Plan B, a P100-million fund has been released to some provincial officials to take it easy on it and not to seriously oppose its court action.

“Todate, the realty tax liability of QPL is already P1.5 billion.

“Why did QPL go to court? Because (a) it has a choice to deposit a much lesser amount (in this case, it deposited only P240 million instead of paying P1.5 billion); and (b) it doesn’t have to pay interest of 2 percent per month. (The interest earned of the amount deposited in court goes to the general fund of the judiciary. At 10 percent, the court has earned P24 million already).

“As for Hopewell now owned by Mirant, it is contesting the tax imposition by the Pagbilao assessor on the ground that it is owned by Napocor.

“But Hopewell is a BOT (build, operate, transfer) project, which means it is still private before it is turned over to the government 25 years from 1994, the date of its commissioning.

“Hopewell owes Quezon province another P1.5 billion in unpaid realty taxes. It protested before the local board of assessment appeals, but it did not deposit the questioned amount. With these much-ballyhooed investments, Quezon is holding an empty bag.

“We the Sentro ng Agapay Legal sa Quezon as NGO (non-governmental organization) are intervening in these tax recovery cases as taxpayers. We feel that the provincial attorney of Quezon, on instructions, is not at par on his job in protecting the interest of the province.

“Where have you seen an answer to the complaint for consignation with application for injunction without any affirmative defense and counter-claim? Only on this one. Ito ang tunay na teope. Itong mga kasong ito nakatago dahil public relations problem ito at nakikialam na ang NPA (New People’s Army).

“Now we are talking of expensive electricity because of the PPA. But don’t you know that with the awesome power of LGUs in collecting taxes and their power to auction (and bid on their own) we can do away with the PPA?

“Remember what Paranaque City did with the Ninoy Aquino International Airport, and Quezon City with the National Kidney Institute?

“Quezon can do that also, because it is all in the book. But precisely the local Osamas were bribed out of their noses, with the money (a pittance compared to the correct taxes to be collected) left dangling as a come-on.

“This is a clear example of causing extreme damage and prejudice to the government by mismanagement of the governor and his subalterns.

“If the power plants would be auctioned off and eventually owned by the province, think of practically slashing 50 percent of electric cost, for after all we in Quezon produce 1,200 mw. And if operated at full capacity, assuming that Quezon becomes the owner of these power plants after the auction proceedings, we can shut a couple of power generators somewhere in Luzon, especially the oil-fired ones.

“These power investors think we are bluffing. Thanks to the corrupt provincial officials who are on their payroll.”

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RETURNING TO THE SCENE: We’re glad to note that former President Fidel V. Ramos is now at the stage of suggesting measures to scale down electricity rates and improve the efficiency of the power system managed by Napocor.

This is certainly better than just tossing blame for the mess arising from his reckless farming out in the 1990s of IPP contracts long after a power surplus was achieved and a safe buffer supply was established.

It’s now up to President Arroyo to listen to him and share the consequences. But if I were GMA, I would discreetly distance myself from the former president on this issue.

There is something disturbing about a retired official insisting on inflicting his presence and presuming to give unsolicited advice. How come FVR keeps coming back? Ano ba’ng binabalikbalikan? He left behind some loose ends?

My barber whose daughter has had to stop schooling to help earn more money for the family tells me that’s normal behavior. They all go back to the scene of the crime, he said.