Senator Emmanuel ‘’Manny’’ D. Pacquiao on Thursday, Oct. 21 slammed Department of Energy (DOE) Secretary Alfonso Cusi for allowing a three-month-old private corporation with a measly P7,000 ‘’contribution’’ paid by its seven incorporators to take over the operation of the electricity spot market and fulfill the requirement of the Electric Power Industry Reform Act of 2001 (EPIRA) as an independent market operator.
Just like the Pharmally Pharmaceutical Corporation at the Procurement Service, Department of Budget and Management (PS-DBM), DOE has this corporation that amassed hundreds of millions of pesos in earnings, he claimed.
Pacquiao, a presidential aspirant, also hit Cusi for failing to address the country’s power outages due to negligence and politicking.
He maintained that Cusi should also be blamed for the high cost of electricity which is considered one of the highest in Asia.
The DOE chief heads the Cusi wing of the Partido Demokratikong Pilipino (PDP)-Laban. The other wing is headed by Pacquiao.
During the Senate hearing on the proposed P2.13 Billion budget of the DOE, Pacquiao claimed that the country’s estimated 20 million Filipino households and the tens of thousands of businesses are unknowingly paying hidden charges on their electric bill because of Cusi’s anomalous scheme in the management and operation of the Wholesale Electricity Spot Market (WESM).
“Kung mayroong Pharmally ang DOH (Department of Health), Starpay ang DSWD (Department of Social Welfare and Development) ay mayroon namang PEMC-IEMOP ang DOE *(If there is Pharmally at DOH, there is also Star Pay at DSWD and PEMC-IEMOP at DOE),” Pacquiao said in his opening statement referring to the Philippine Electricity Market Corporation (PEMC) and the Independent Electricity Market Operator of the Philippines (IEMOP) which are involved in the operation and management of WESM.
“Iisa po ang modus (operandi) ngayon (There is only one modus now). Magtatayo ng bagong kumpanya na katiting ang capital, walang experience or kakayahan, at kukuha ng kontrata sa gobyerno na bilyon-bilyon ang kita (A new company has been established with very small capital, no experience and got government contracts worth billions of pesos). Hindi nagpatalo ang DOE (DOE was not far behind),” he added.
Pacquaio maintained that because of Cusi, the country’s electricity consumers are paying at least .0086 centavos for every kilowatt-hour that they consume or at least P1.70 for every 200-kilowatt hour which is considered the baseline consumption for lifeline users.
This translates to at least P34 million to P40 million in hidden charges that are illegally collected from electricity consumers every month, he pointed out.
In the hearing, Pacquiao revealed that despite clear violations of the Anti-Graft and Corrupt Practices Act, the Government Procurement Act, and the Electric Power Industry Reform Act of 2001 (EPIRA), Cusi allowed a three-month-old private corporation with a measly P7,000 contribution paid by its seven incorporators to take over the operation of the electricity spot market and fulfill the requirement of the EPIRA as an independent market operator.
“Batid po natin ang patuloy na problema ng bansa pagdating sa ating suplay ng kuryente (We know that there is a problem in the supply of power in the country). Habang busy sa pamumulitika itong ating Kalihim ng DOE na si Alfonso Cusi ay lalong dumadalas ang mga brownout sa iba’t-ibang sulok ng bansa (While Cusi is busy campaigning, the number of brownouts in the country increases). Hindi na rin mapigilan ang tuloy-tuloy na pagtaas ng presyo ng ating kuryente (Increases in the price of power is also noted). Ang mas masakit, Mr. Chairman, ay ginawa pang raket ng mga mag-kakamag-anak, mag-kakaibigan at mga mag-kakampi ang pagpapatakbo sa ating electricity spot market(What hurts most is that relatives, friends and confederates are in collusion in running the electricity spot market) ,” Pacquiao said before presenting a video detailing the irregularities in the electricity spot market.
Despite the provision in the EPIRA that there should only be one independent market operator, Cusi retained the previous market operator, Philippine Electricity Market Corporation (PEMC), purportedly to manage the operation of the IEMOP and serve as the collecting agent for the market transaction fees (MTF) which is divided between PEMC and IEMOP.
Pacquiao said that the MTF should be charged from the generating companies and not passed on to consumers.
“Maliwanag na napagsasamantalahan ang taumbayan (It is clear that Filipinos were taken advantage of). Ito ay dahil sa binabayarang market transaction fee na dapat sana ay sagot ng ating mga generating companies (This is because the public pays foe the transaction fee which should be paid by generating companies). Nakita natin na sa halip na magkaroon ng competition sa spot market na siyang layunin ng EPIRA Law ay nagkakaroon ng SABWATAN upang lalong tayong pahirapan (We have seen this that instead of having competition in the spot market as mandated by the EPIRA law, there is conspiracy that causes difficulty shouldered by consumers),” Pacquiao said.
“Nakita natin kung paano sinindikato ng mga nasa kapangyarihan ang EPIRA Law upang lalo pang magkamal ng kapangyarihan at salapi (We have seen syndicated operation under the EPIRA law that allowed persons to have power and pocket money). Yung trabahong para sa isa ay ginawang dalawa kaya doble-doble ang bayarin ng ating mga consumers (This results in consumers paying more). Yung kanilang seven thousand pesos, ginawang bilyon (There P7,000 turned into a billion). Yung EPIRA, ginawa nila PERA sa kanilang mga bulsa (Epira was used to make money). Daig pa nila ang nanalo sa lotto (It beat Lotto),” he added.
Pacquiao’s position was reinforced by the ruling issued by the Energy Regulatory Commission (ERC) which declared that PEMC is a Government-Owned or Controlled Corporation (GOCC) that is subject to strict laws and procedures.
Pacquiao said the ERC’s 26-page unanimous decision has provided the “smoking gun” which would prove that Cusi, lawyer Melvin Matibag of Transco, and others, have violated the Anti-Graft and Corrupt Practices Act, Plunder under Rep Act No. 7080, and the Electric Power Industry Reform Act of 2001 (EPIRA), among other criminal and administrative violations, for allowing a private corporation to illegally collect market transaction fees from electricity consumers.
Pacquiao said that the act of Cusi violated the Epira Law since the law requires that the independent market operator must be “financially and technically capable, with proven experience and expertise of not less two years as a leading independent market operator of the similar or larger size electricity market.”
With the ERC ruling, Pacquiao said that this would mean that PEMC and IEMOP are illegally collecting billions of Market Transaction Fees (MTF) from electricity consumers since 2018.
Pacquiao added that they also violated the provisions of the Administrative Code of 1987 for the designation of Laguna Provincial Board Member Ma. Rene Ann Lourdes Garcia-Matibag, wife of Cusi’s loyal sidekick, National Transmission Commission President Melvin Matibag as one of the incorporators and interim board members of IEMOP and the appointment of Richard J. Nethercott, husband of DOE Assistant Secretary Caron Aicitel E. Lascano, as Director of PEMC and President/Chief Executive Officer of IEMOP.
Pacquiao said that while Mrs. Matibag had resigned shortly after the creation of IEMOP, her designation as incorporator and interim board member did not just violate the law against nepotism but also Republic Act No. 6713, otherwise known as the “Code of Conduct and Ethical Standards for Public Officials and Employees.
Also patently anomalous and a clear violation of the EPIRA Law is the existence of two sets of the board of directors for both the PEMC and IEMOP, which is involved in operating the electricity spot market, thereby unnecessary bloating the number of personnel and expenses for a function that can be run and managed by a few individuals who are experts in the power sector and the electricity spot market.