Palace claims Lopezes using diversionary tactics through ads

May 15, 2008

By Sherwin C. Olaes - Its an ironic twist, it is now Malacañang accusing the Lopezes of engaging in diversionary tactics after the family’s patriarch, Oscar Lopez, sought in full-page advertisements that appeared in major newspapers the removal of the sales tax on electricity and the huge royalties on natural gas supplied from the Malampaya field to lower power rates.

Engaging the Lopezes in a battle over the supposed high electricity rates from the Manila Electric Co. (Meralco) was believed to have been resorted to by President Arroyo to deflect growing criticisms against her after testimonies before the Senate linked her directly to the anomalous National Broadband Network (NBN)-ZTE controversy.

Chief Presidential Legal Counsel Sergio Apostol said the Lopez demand that appeared in the advertisements was a diversionary tactic.

“That’s the style of Mr. Lopez to pass on to the masses their mistakes and abuses, demanding (the government) to lift eVAT but that is not the solution because there are 101 ways to reduce electricity charges without the eVAT being removed,” he said.

“The lifting of eVAT would hurt our infrastructure, and other government programs to our people,” he said.

Apostol also appealed to the Senate to focus on Meralco’s alleged abuses, rather than hauling another witness on the NBN-ZTE anomaly who will supposedly

provide direct links to Mrs. Arroyo’s involvement in the scam.

The controversial $329 million ZTE deal was scrapped last year by the President after allegations of overprice and kickbacks were brought out during the Senate inquiries.

“(The Meralco issue) is important because it affects our people. Our President has been working very hard, an intention that would directly benefit the masses…for Meralco to lower its electricity rates, we should help her in this cause, instead of them (Senate) pursuing NBN investigations that have no basis. They are only wasting their time,” he said.

In a full page advertisement the other day, the latest in a series of advertisements supporting Meralco, Lopez proposed that eVAT be removed and the royalties of Malampaya gas be waived or proceeds used to subsidize low income consumers and other preferred sectors such as the export industry.

Lopez said for the first quarter, First Gas, an independent power producer which his family owns, had a selling price of P4.15 per kWh to Meralco, in which P2.93 per kWh or 70 percent was the cost of gas and approximately P1.61 per kWh goes to government in the form of royalties.

On top of this, the consumer still pays 80 centavos per kWH in the form of a 12 percent eVAT.

“If you add up the royalties and 12 percent eVAT, you will get an amount of P2.40 kWh which may be passed on as a welcome reduction in electricity bills of consumers,” he said.

“Under present circumstances, even if we use more indigenous fuels in our power generation mix today, that really doesn’t lead to lower electricity prices and is not likely to spur more development of indigenous energy until these structural disincentives are corrected,” he said.

“I will answer the basic question we posed with another question. If we clamor to have cheaper power, why do we tax it so heavily in the first place? Your Excellency, if you want to give cheaper electricity rates to consumers, you must remove these eVAT taxes and royalties on natural gas,” Lopez added.

Apostol said with the privilege speech of Rep. Luis Villafuerte (Camarines Sur) the other day in the House of Representatives, in which the Lopezes were accused of engaging in massive cheating of electricity users by passing on to consumers the cost of ghost deliveries of electricity from one of its sister companies, “ It is high time that the family should cooperate with the government instead by opening their books of account.

“That’s why we’re challenging Mr. Lopez First Philippine Holdings, (the latter’s representation in) Meralco, if he has nothing to hide they should open their books of account and let our congressmen scrutinize it…but I don’t know if they (Meralco) would cooperate since they may fear being charged in court if the case against them is strong,” he said.

Apostol said the public should not merely stay as fence sitters and urged civic groups to file a criminal case against the Lopezes and Meralco officials.

“As consumers or stockholders, we can go to court on a mandamus to have Meralco open their books of account,” he said, maintaining that Malacañang would not intervene on the investigations already being conducted by both Houses of Congress.

Apostol said Villafuerte’s revelation is serious and that the former should back it up with proper evidence, oral and documentation to strengthen the people’s case against the Lopezes.

“The JCPC (Joint Congressional Power Commission) should investigate Rep. Villafuerte’s revelation,” he said.

Government Service Insurance System (GSIS) president, meanwhile, called as “baloney” the defense of Meralco about the ghost electricity purchases allegation of Villafuerte.

“That’s baloney, and Manong Christian Monsod (Meralco board director) should know better than to feed us that gaseous nonsense,” he said.

Garcia said this yesterday in reaction to Monsod’s “lame defense” of Meralco’s reported charging of its customers a whopping P13 billion for “ghost power deliveries.”

“The Villafuerte exposé was explosive because of its utter simplicity. It is a gut issue that everybody understands. Buking na sila (they’ve been exposed),” Garcia said.

The GSIS chief was referring to a privilege speech by Rep. Villafuerte Wednesday which detailed Meralco’s payment of P1.08 billion each month to its sister-company First Gas for 1,000 megawatts of electricity at a time when its power plant can only supply a measly 300 megawatts.

Villafuerte described the “sweetheart deals” involving Lopez companies like Meralco and First Gas as “scandalous, anomalous, immoral and illegal.”

“The P13 billion Meralco charged its customers was for power needed at the time of purchase, and not for power that may be needed in the future as what Mr. Monsod would want us to believe now,” Garcia stressed.

Garcia said Monsod is insulting the intelligence of Filipinos by peddling to them the story that Meralco made a “surreptitious” overpayment to First Gas to the tune of P13 billion for gas that had been stored for future use in generating electricity.

“That’s a lot of gas, the kind that stinks,” said Garcia of Monsod’s explanation. “I pray that I’ll never reach a point in my life when I will have to defend the indefensible like Meralco by mouthing rubbish,” he added.

As Meralco is accused of overcharging its customers in billions of pesos that could be used by poor Filipinos to buy food, medicine and other necessities, Garcia said Monsod should do some soul-searching. “He should not allow Meralco to destroy his legacy, not at this point of his life,” Garcia said.

In his privilege speech, Villafuerte said the overpayment by Meralco and the under-delivery by First Gas happened from December 2000 to November 2001. Meralco paid First Gas P1.08 billion for each of the months for a total of P13 billion.

Aside from the 13 billion, Meralco had also been ordered by the Supreme Court to refund P30 billion to its customers for overcharging them from 1994 to 2002. Villafuerte said Meralco still owes consumers P18 million from that refund alone.

Garcia also chided Monsod for blaming Meralco customers for Meralco’s failure to complete the refund soonest. “Meralco is making it very hard for its customers to get their refund. That’s the bottom line. Meralco has been asking for so many documents. Meralco does not want to give us back our money, and Mr. Monsod can spin that all he wants.”

Garcia said that with the Lopez-controlled Meralco found to be also charging to its systems loss the 72 million kilowatt hour it uses each year, the Lopezes will only have themselves to blame if the people suspect that Meralco customers are also being made to shoulder the electricity bills not only of other Lopez companies, but also those of its executives.

“The joke going around is that Meralco customers may also be paying for the salaries of the cooks, drivers and maids of this blessed family. The joke is on us, if it’s true,” Garcia said. With Tribune wires

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