Retired PAF General Bares Another Major Headache for the Lopez Family After ABS-CBN Closure

A former general of the Philippine Air Force (PAF), Major General Romeo V. Poquiz bares another major headache for the Lopez Family after the closure of ABS-CBN.

The Lopez Family are indeed facing another battle based upon the information revealed by Major Gen. Poquiz who is one of the most vocal supporter of Pres. Rody Duterte on social media.

The former member of the AFP made the controversial prediction after Congressman Mike Defensor mentioned another Lopez sin - that on electricity during the last hearing on ABS-CBN franchise renewal.

According to General Poquiz the explosive issue involving ABS-CBN is in another commodity service, electricity. The retired pilot cited an important development in Meralco's history before the Lopezes sold the company to a new owner that should explain to consumers why our electricity bills increased during the ECQ when market forces say otherwise.

Congressman Defensor also revealed some controversial transactions entered by the Lopez Family particularly in the Power Supply Agreements with First Gen Corporation. The alleged agreement were onerous to us electricity consumers due to some reasons.

Read the Complete Statement of Gen. Romeo Poquiz:

Broadcasting, Done. Electricity, Next.

During the last day of the ABS-CBN Franchise hearing, Congressman Defensor  mentioned another sin of the Lopez oligarchy - that on electricity. He was cut short by the Chairman of the Committee, however, because electricity is not related to the franchise.

They agreed to tackle said issue in a separate hearing by the Good Government and Public Accountability Committee.

Anyway, this is another explosive issue, not only because of the 25 years locked-in price as mentioned by Congressman Defensor, but also on some other issues.

Before Meralco, an electricity distribution company, was sold by the Lopez family sometime in 2010, it entered into Power Supply Agreements (PSA) with First Gen Corporation, thru its 2 subsidiaries FGPC & FNPC - power generation companies also owned by the Lopezes. Said PSAs were onerous to us electricity consumers due to the  following:

1. They have provisions where the generation costs of electricity is locked and guaranteed for 25 years. This is detrimental to us consumers because even if the current owners of Meralco would like to reduce the current cost of electricity, they cannot do so due to the lock-in price.

If there was no lock-in, costs of electricity these days should be much lower because of the huge drop of fuel prices in the world market.

2. The PSAs have “Pass Through” provisions where the costs of generating the electricity is passed on to the customers at the locked-in price.

3. The PSAs have Take or Pay (ToP) provisions whereby whether all the generated electricity is utilized or not, the customers still have  to pay the entire amount of electricity generated.

The PSAs were clearly sweetheart deals. There was conflict of interest by the owners - both the seller and buyer of electricity. This is a related party transaction that should be seriously looked into by government regulators. The Congressional investigation on this is therefore once again exciting to watch.

As with the ABS-CBN  compromise with BIR where ABS-CBN only paid 3.8%, out of  100% of its tax dues, the Lopez family will argue that the PSAs, including  all its onerous provisions, are legal,  because the electricity rates were approved by the Energy Regulatory Commission. That may be the case.

However,  there is such a term as Regulatory Capture - the corruption of the regulated co-opting the regulator.

Source: Gen. Romeo Poquiz FB Page

Retired PAF General Bares Another Major Headache for the Lopez Family After ABS-CBN Closure Retired PAF General Bares Another Major Headache for the Lopez Family After ABS-CBN Closure Reviewed by Phil Newsome on July 18, 2020 Rating: 5
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