Writing from treacherous memory, it may be useful to my readers to know that, years ago, Meralco used to be owned and controlled by American stockholders; who decided to divest their shares of Meralco at a price and terms that even today’s businessmen will marvel at the very attractive payout scheme which came out from the income of Meralco. The group that bought Meralco was headed by the patriarch of the Lopez clan, Don Eugenio Lopez. After martial law was declared, Don Eugenio himself allegedly offered to sell his holdings in Meralco to the government. However, what is left unsaid was the fact that the government, up to that time, did not grant Meralco an electricity rate adjustment. Since most of the Meralco plants used bunker fuel, without such rate adjustment, Meralco would have gone bankrupt and the banks would have foreclosed it. At that time, the price of a barrel of oil which was .60, had gone up substantially. In 1972 before martial law was declared, the peso-dollar rate was R3.60. This rate was also deteriorating fast. Meralco therefore, had to raise its peso income in order to pay for its increased operating cost and its dollar loans.

According to a retired CPA who used to advise a close relative of Marcos – the original plan was to create a Meralco foundation or another entity, wherein all electricity consumers would become members or stockholders thereof. In short, the consumers would become owners of Meralco. Between the takeover and the implementation of the plan, I believe greed took over. Thus, the plan was aborted. When the Aquino revolutionary government took over from Marcos, Meralco and ABS-CBN were returned to the Lopez clan. I have to confess that up to the present, I don’t know what were the terms and the conditions for said turnover, neither does the public.

The people who control Meralco are not ordinary businessmen. They know how to run their business with a critical eye on their bottom line. They also know how to convince and persuade the proper authorities to appreciate their point of view. For example – the charging by Meralco of their income tax payments to the consumers "is perfectly legal," because it was approved by the Energy Regulatory Board/Commission. It was legal, until the Supreme Court said otherwise. Another example was when the rates were allegedly increased without the approval of the ERC. Again, the Supreme Court came to the rescue of the public. All in all, billions of pesos of refunds to the consumers are involved. How much of these refunds have been fully paid etc.? These issues have not been adequately answered either by Meralco or ERC. The last issue is the controversy between Meralco and Napocor in connection with their 10 year power supply contract. Napocor has demanded that Meralco pay them billions of pesos for their failure to draw the contracted amount of electricity. Napocor claims Meralco instead used the electricity supplied by First Gas, a Lopez-controlled subsidiary. Rep. Villafuerte said that R12.9 billion was paid by Meralco to First Gas for electricity that was not delivered to Meralco. Meralco claims that the reason that it was not delivered was because Napocor failed to provide timely, adequate transmission lines. Under their contract with First Gas they had to "take or pay" for electricity that was not delivered. To make a long story short, Napocor and Meralco agreed to settle their controversy under a compromise agreement. The agreed amount is about R22 billion. Others claim that with accrued interest, the amount is R50 billion. Do you think that Meralco will pay that amount? No. Napocor and Meralco agreed to file a petition with the ERC to approve their agreement and authorize the collection of said amount from the consuming public. Meralco and Napocor are both corporate entities run by their respective boards of directors. If any or both their boards made wrong management decisions, why should the consuming public be penalized for their mistakes? Instead, should it not be Meralco that should answer for the acts of its management and directors? Let my readers decide!

For any comments, reactions and/or suggestions, email the author at rene.espina@hotmail.com