By Alex Magno
Too bad, Meralco chair Oscar Lopez reversed quickly his position on selling the Lopez stake in the power distribution monopoly.
The earlier offer to sell was attributed to an emotional outburst by the Lopez patriarch. Proper business sense might have also eventually taken hold. Several power plants, majority-owned by the Lopez holding company, earn much more than Meralco selling to the distribution monopoly.
But that is precisely the issue. With the Lopez group controlling management of Meralco and Lopez-owned power producers selling to the monopoly, a very clear conflict of interest pertains. That conflict of interest could be injurious to consumer interest and welfare.
A very interesting point was brought out in the course of the congressional hearings on the Meralco issue last Monday. By deft questioning, Sen. Juan Ponce Enrile elicited from Meralco representatives that fact that the company consumes 72 million kilowatt hours of electricity each year.
Meralco, it appears, does not pay for the electricity it uses for its own operations. In which case, the cost of that large volume of power usage is passed on to consumers. At a discounted rate of P5.70 per kilowatt hour, the cost of that volume of power adds up to P427.5 million. That amount is added to the bills consumers pay.
That might only be the tip of the iceberg. Meralco should be asked to reveal all major buyers of power who benefit from discounts and deferred payment arrangements. That might be an interesting list. Read more...
Too bad, Meralco chair Oscar Lopez reversed quickly his position on selling the Lopez stake in the power distribution monopoly.
The earlier offer to sell was attributed to an emotional outburst by the Lopez patriarch. Proper business sense might have also eventually taken hold. Several power plants, majority-owned by the Lopez holding company, earn much more than Meralco selling to the distribution monopoly.
But that is precisely the issue. With the Lopez group controlling management of Meralco and Lopez-owned power producers selling to the monopoly, a very clear conflict of interest pertains. That conflict of interest could be injurious to consumer interest and welfare.
A very interesting point was brought out in the course of the congressional hearings on the Meralco issue last Monday. By deft questioning, Sen. Juan Ponce Enrile elicited from Meralco representatives that fact that the company consumes 72 million kilowatt hours of electricity each year.
Meralco, it appears, does not pay for the electricity it uses for its own operations. In which case, the cost of that large volume of power usage is passed on to consumers. At a discounted rate of P5.70 per kilowatt hour, the cost of that volume of power adds up to P427.5 million. That amount is added to the bills consumers pay.
That might only be the tip of the iceberg. Meralco should be asked to reveal all major buyers of power who benefit from discounts and deferred payment arrangements. That might be an interesting list. Read more...
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