"Here’s the list from Secretary Dominguez."
R.A. No. 7648 or the Emergency Power Act given to then President Ramos was approved on April 5, 1993 was intended to save Napocor. The objective of the Private Sector Assets and Liabilities Management was restated in Section 5 of the EPIRA Law (R.A. No. 9136), approved on June 8. 2001, was to liquidate the debt of Napocor, sell and dispose its assets including the IPP contracts it entered into, as well as some of the real estate properties it owns. From a biggest income-generating government agency, Napocor was bankrupted by the do-gooders with PSALM doing the rehabilitation.
On the contrary, the independent power producers recklessly violated their part of the obligation when supposedly they are mandated to liquate all their overdue accounts with Napocor. In fact, even before Napocor could fully pay Westinghouse, it accumulated an even bigger amount of uncollectible account, which reason why it sold its geothermal plants, hydropower dams, and in maintaining, expanding and securing our transmission grid.
Finance Secretary by Carlos Dominguez listed the following as among the independent power producers and electric cooperatives that have unpaid loans to PSALM:
South Premiere Power Corp. (SPPC), a conglomerate of San Miguel Corp. (SMC), amounting to P19.75 billion;
Ilijan gas-fired power plant in Batangas City with unpaid obligation of P23 billion plus P2.62 billion for other charges;
Vivant-Sta. Clara Northern Renewables Generation Corp. owes P3.86 billion for operating the Bakun Hydroelectric Power Plant in Ilocos Sur;
Good Friends Hydro Resources Corp. P1.16 billion, while FDC Utilities, Inc. owes P1.12 billion. Both administer the Unified Leyte Geothermal Power Plants;
The Filinvest Utilities subsidiary, the FDC Misamis Power Corp., owes PSALM P2.56 billion, for the Mindanao I and II geothermal power plants;
Ten electric cooperatives and industries with unpaid obligation of P28.74 billion leading of which is the Lanao del Sur Electric Cooperative (Lasureco) has the highest and longest account at P9.63 billion;
The Public Utilities Department of Olongapo City, P6.07 billion. PICOP Resources Corp., amounting to P2.96 billion;
Albay Electric Cooperative, Inc. also known as the Albay Power Energy Corp., P2.61 billion;
Maguindanao Electric Cooperative, Inc., 1.76 billion;
Global Steelworks International, Inc., with unpaid account of P1.68 billion;
Pampanga III Electric Cooperative Inc., with P1.27 billion;
Davao del Norte Electric Cooperative Inc. with P1.24 billion;
Magellan Cogeneration, Inc. P750.86 million;
Bacnotan Steel Corp., with P743.68 million;
Five other electric cooperatives. Among them are: a) Northern Samar Electric Cooperative Inc. with P742.13 million; b) Sorsogon II Electric Cooperative Inc. with P510.15 million; c) Samar I Electric Cooperative Inc. with P303.04 million in unpaid account; d) Zamboanga del Sur II Electric Cooperative Inc. amounting to P275.69 million; e) Sorsogon I Electric Cooperative with unpaid obligations of P206.23 million.
All the various independent power producers, distribution utilities, electric cooperatives and heavy users of power energy accumulated an overdue account of P59.23 billion as of December 2018. Several IPPAs have unpaid accounts of P28.46 billion.
As we see it, the opposition has been zeroing in on the State Grid Corporation of China, which came to the rescue of Napocor after the various foreign consultants bungled their recommendations to resuscitate the industry. Their suggestion pushed the country’s premier energy corporation deeper in debt after they recommended the deregulation of the power rates and the scrapping of the franchise tax (P.D. No. 551) on utility operators but passing it on to the consumers as added cost to their monthly bills. Despite the monumental debacle, not one was held to account. The passed-on charge was made collectible from the consumers at an average of .07 percent.
On top of it, almost all the owners of the power generation plants and distribution utilities defied and/or circumvented Section 28 of R.A. No. 9136, which requires them to reduce their stock ownership to a maximum of 15%. The few that were listed in the Philippine Stock Exchange remain unverifiable or are fronted by dummies. As one observed, the de-monopolization law is more of a farce. The modern-day oligarchs practically acted like living gods, dictating and shaping the country’s economic and political life.
It is an open secret that owners do not only own one or more generation plants or have franchise to operate distribution utilities in other areas to evade the divestment requirement. They trifle with the country’s investment laws by their creation of interlocking corporations engaged in the same or similar business, thereby making it hard for the government to dismantle the cartel in the industry.
In their scheme to deceive the consumers to agree to their cost of electricity, they created a specialized market for the sale of energy like a commodity. It is a neoliberal concept that if goods are openly traded, the presumption is that the price will naturally subside. It is based on the conventional economic postulate of law of supply and demand. The Epira Law called their novel idea wholesale electricity sport market or WESM to be operated by the members of the energy cartel.
To implement the plan, the cartel created a non-stock corporation to oversee the day-to-day trading of their invisible commodity to “exact” from the consumers the best price they could offer. WESM thereby created the Philippine Electricity Market Corporation (PEMC) to sell to consumers and even to operators the power-generation plant and distribution utilities electricity where the demand is high always for a profit. In theory there is the day-to-day change in price measly ranging say to 001 centavo per kwh, but consumers practically has no way to decide how much it will cost them, except to accept the posted price made by the cartel operators.
What used to be operated by Napocor as a system of monopoly in the supply and distribution of electricity, that only Napocor can generate power to be sold to the various distribution utilities, that role has effectively been taken over by PEMC though WESM. PEMC appoint the personnel and supervisors to carry out their trading activities.
Like the stock-ownership divestment scheme in R.A. No. 9136, WESM turned out to be a big joke. Never has there been an instance where the price of electricity dropped though the initiative of WESM. The role of fixing the rate of electricity or reducing it has instead become the odd job of the Supreme Court after the deregulators effectively defanged the ERC. There is no love lost in the relationship between the consumers of electricity and the cartel that controls the power energy. As one observes, the institution of PEMC has become a syndicated superhighway where the traders of electricity and the government collude in fixing the rate with the latter acting more as onlooker.