Many are curious as to who is really running the National Grid Corporation of the Philippine. Some have noticed that there is one who sits in the board whose interest cannot be identified.
In the 2010 election, Henry Sy, Jr., aka “Big Boy”, acquired 100 percent ownership in Monte Oro Grid Resources Corp., a company owned by the group of Ricky Razon. Monte Oro together with Calaca High Power Corporation combined their resources to acquire 60 percent of NGCP, and the 40 percent was acquired by China’s State Grid Industry Development Limited. Monte Oro and Calaca High Power, the latter representing the Coyuito Group, or a total of 60 percent local ownership.
The problem is while San Miguel Corporation’s name does not appear, which in fact is being denied by its President and CEO, Ramon Ang, rumors abound that it is an alleged “silent partner” represented in the board by a certain lawyer by the name of Ferdinand de Chavez. Many are curious for while it appears that lawyer Anthony Almeda is the chief administrative officer of the NGCP, the assistant de Chavez is clearly not representing Monte Oro or Calaca High Power.
While Alameda can legitimately represent Henry Sy, Jr., being his direct subordinate, de Chavez’s representation appears fuzzy. Such is now the subject of speculation because SMC’s foothold in the NGCP violates Section 45 of the Electrical Power Industry Reform Act of 2001 or RA. No. 9136.
Accordingly, NGCP is the appointed concessionaire of the National Transmission Corporation’s (TransCo) after the National Power Corp. (Napocor) was chopped to pieces. Some say the entry of SMC into the transmission sector consummated its travesty of the Epira Law. This is obvious because SMC’s acquisition of Manila Electric Company where Ramon Ang stands as president, it used its Triratna Holdings to gain control. Aside from having acquired a sizeable chunk, SMC also acquired some of the generation assets of Napocor.
Effectively, that now gives SMC the undue advantage of controlling the price of electricity. SMC is not only engaged in power generation and distribution, but also controls the transmission of electricity. As one industry insider would succinctly put it, “Even a corporate veil will not free any partner in violating that provision of the law, because affiliates are included in the ban.”
Unfortunately, in every sector that makes an added cost on how much the consumers will pay, the name of San Miguel Corporation is always present, and its shares (control) are pivotal. Whereas before, it was the duty of Napocor to restore the damaged facilities in the typhoon stricken areas, today the public is made to pay for the restoration of those facilities. Last December 10, the Energy Regulatory Commission approved NGCP’s application to allow it to pass on to its customers a total of P213.658 million covering its costs to restore transmission facilities damaged in 2009 and 2010.
Badly affected are the electric cooperatives, which principally were organized to carry out the missionary work of providing electricity in the rural areas. This, on top of the 9 centavo-hike in transmission charges and 2 centavos from a higher systems loss charge. Despite the increasing charges imposed by the NGCP, nothing about its earnings has been disclosed.
Incidentally, the privatization of the power industry was dictated by the IMF-World Bank tandem and by the foreign brokers that installed Mrs. Arroyo. Her economic managers entertained the naïve idea of preventing one group from controlling the industry. It was some sort of half-baked version of the anti-trust law. The problem however is it resulted in the creation of businesses that would earn for the carpetbaggers profit they did not imagine.
For instance, in an industry where one can count the players by the fingers, common sense would tell that real competition will never set in — only a cartel to fix and make uniform their prices on the basis of assured profit will work. That happened after the privatization of the power industry. The generation plan operators were allowed to trade electricity under that highfalutin Wholesale Electricity Spot Market, on the assumption that competition will reduce the price of electricity as prophesied by Ramos. Instead, WESM became a casino for the gambling of electricity as a commodity.
Since the cost of electricity could be anticipated, the trading just revolved on how much the traders would earn as their commission. The remarkable decrease in the cost of electricity never redounded to benefit the consumers. The same can be said of the now segregated transmission lines. Many are asking why the transmission lines, integral to the power industry, were segregated. Worse, why were the new owners allowed to collect “wheeling charges” under a flexible rate of fees?
They should not have been allowed to borrow the arguments of the distribution utility operators like pointing to the steep increase in oil prices. Maybe for such unforeseen damage wrought by typhoons, they should be compensated, but not for them to enjoy an adjustable wheeling rate. In the first place, their clients are the operators of the power plants and the distribution utility operators, and not the consuming public.
rpkapunan@gmail.com
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