Monday, May 19, 2008 Villafuerte: Allegations vs First Gas are true
"DOCUMENTS don't lie."
This was the reaction of Camarines Sur Representative Luis Villafuerte, after First Gas, sister company of Manila Electric Company (Meralco) belied the accusations launched by the lawmaker to the Lopez-owned firm for allegedly delivering ghost power supply.
Villafuerte said he has documents filed before the Securities and Exchange Commission (SEC) and the Energy Regulatory Commission (ERC) and are official records of Meralco and First Gas showing evidence that Meralco and First Gas' billed consumers P12.9 billion in pass on charge.
On his privilege speech last week, he accused Meralco of paying First Gas P12.99 billion from December 2000 to November 2001 without delivery of electricity to Meralco.
In support of his accusations, congressman Villafuerte declared that the contract that First Gas made with Siemens is to install a 1000-megawatt (MW) capacity in natural gas divided into 2 blocks of 500 MW each.
In the year 2000, the first block of 500 MW was installed but the generated output was only roughly 300 MW.
However, Villafuerte said Meralco paid for 1000 MW, which is in excess by 700 MW of the deliverable capacity of First Gas in 2001.
What is even worse, Villafuerte said in 2001, even if it is assumed that Siemens had installed the second block of 500 MW to complete the 1000 MW contracted for, First Gas, due to some technical problems, shut down the plant and therefore there was no power that could be delivered at all to Meralco.
"Meralco is misleading the public when it said in its full page ad that 1000 MW was always available since August 2000 when documents submitted by First Gas to the SEC stated that on September 2000, First Gas accepted from Siemens only the completion of one block of 500 MW therefore belying Meralco's claim that as August 2000, 1000 MW was already available," Villafuerte charged.
But Meralco denied the allegations, saying First Gas remains to its commitment of delivering clean power supply.
First Gas has remained steadfast in its commitment to government to deliver clean power using the country's natural gas from Malampaya in Palawan. In fact, First Gas has always been ready to generate 1,000 MW since its full commercial operations in August 2000.
"However, state-owned National Power Corporation (Napocor) has not kept its part of the bargain on the availability of the transmission lines needed to transport power from the First Gas plant," Richard Tantoco, First Gas Executive Vice President (EVP) and chief operations officer (COO) said.
He noted that since August 2000, First Gas has always requested Napocor for a higher dispatch of its power plant.
Tantoco said a higher dispatch would give Meralco consumers the best rate per kilowatt-hour (kwh), adding that this can be seen in the latest figures of Meralco in its website, which showed a comparative breakdown of the rate per kwh of its major suppliers including First Gas.
When First Gas is dispatched as contracted, its rates are competitively lower in spite of natural gas being taxed heavily.
But the solon said Meralco aggravated its deception by using such phrases in the ad as "available capacity" without clearly clarifying that capacity is less than 1000 MW and the output of what was then available was only less than 300 MW.
The lawmaker further said, "another despicable lie of Meralco is the frivolous excuse that it is not only Meralco that pays for power that is not delivered because other power plants have what is called a "take or pay" provision."
"But what Meralco conveniently omits to mislead the consumers, is that under "a take or pay provision", the public utility distributor must pay the generating company if they have demonstrated capacity to deliver but if the distribution company does not want to take such delivery it must therefore nevertheless pay," he declared.
The full-page advertisement of Meralco, according to Villafuerte aims to deceive the public because in August 2000, when they claimed that their plant was on stream, Meralco paid First Gas P7.41 per kWh when Napocor's rate was P3.24; in September it was P6.86 and Napocor was P3.23 while in October 2000, Meralco paid First Gas P8.05 compared to Napocor's P3.33.
In November, they paid P9.86 per kwh when Napocor's rate was P3.49 and for the same period in 2000, Meralco also paid its other independent power plant (IPP) -- Quezon Power P6.07 in August; P7.26 in September and P9.08 in October and P11.64 in November 2000.
"Instead of disputing my accusations, Meralco in its full page ad, impliedly admitted the veracity of my accusations, by claiming that they had the capacity which they did not and then proceeded to allege that First Gas delivered power to Meralco in 2001 when in truth and in fact, it was sourced by Meralco from Napocor," Villafuerte said.
Meantime, Villafuerte said "I will call Meralco and First Gas officials to testify under oath at the congressional hearing and hold them to account their misleading and deceptive claims in their paid advertisements." (MSN/Sunnex)
