Arroyo vs Lopez

As officially presented, the government wants Meralco to reduce its rates drastically following the order to Napocor to cut the price of electricity it sells to Meralco by 50 percent.

That looks like a ploy, knowing as everybody does, that the cut sought from Meralco is next to impossible.

The real fight is over the control of management which is now headed by the Lopezes.

The winners and losers will be known after the annual stockholders meeting of Meralco is held this month.

The state has the equivalent of four seats in the board of directors of the public utility company. The Lopez group also has four.

The first stage of the battle is for proxies that will enable the state to have control over the board which will elect the management group.

The Lopezes will have the fight of their lives. They will not give up easy. They never did at any time except when Ferdinand Marcos seized it for the state. Management was returned to the Lopezes by President Corazon Aquino.

Businessmen, specially the members of the Filipino-Chinese Chamber of Commerce and Industry, have been summoned by the President to appear before the Energy Regulatory Board.

They have no business being there unless they are witnesses. President Arroyo uses them to make it appear that indeed, there is widespread demand for Meralco to cut its rates.

But the businessmen are simply being used as members of a cheering squad as if their presence can influence the decision of the ERB. The supporters of President Arroyo, not really of the reduction, are now saying that Meralco should share its profits with the consumers. It is claimed that the company made a profit of more than $600 million last year, a profit skimmed from the consumers.

Maybe so. But the lapdogs of President Arroyo refuse to look at the rising cost of electricity Meralco itself generated.

The company produced nearly half or 1,500 MW out of the 3,500 it retails. In this sense, the order to Napocor to reduce its rates to Meralco by 50 percent will not necessarily force Meralco to adjust its rates accordingly.

Neat trick. Reduction is necessary to give consumers a respite from excessive power bills. But again that is a mere cover for what many consider as inner private motive of powerful people supported by President Arroyo.

The buzz in business circles is that the presence of Vicot Panlilio, former executive vice president of the absorbed Far East Bank and Joti Javier, former EVP of Rizal Commercial Banking Corp., is an ominous sign.

The two are nominees of the state but are said to be actively supporting the hidden motives of powerful people.

The control of management by people nominated by government is the biggest threat to Meralco. Not the reduction of the rates which will not happen, anyway.

Once in management, the powerful group will bark the orders on how to skim Meralco from the top.

Considering the huge amount of money the Lopezes make from the companies they own and which supply nearly all the requirements of Meralco, these firms, completely unrelated to Meralco may simply be forced to disappear if the new management should decide, like many feel it would, to create another company controlled by the powerful man through his numerous dummies.

The Lopezes will not throw in the towel that easy. They have enough resources and clout to ensure that they control the board. We will see if that can happen in the annual meeting this month.

In the final analysis, the Arroyo government has no intention of grabbing Meralco from the Lopezes by any means, fair or foul.

She is obviously allowing herself or the powers of her office to force a change in management where the Lopezes will be left with a minimal role.

In simple language, the order to reduce the rate for the benefit of the consumers is a disguise to cover another thievery under a new management group.

The rates may not be reduced. Profits could fall. The benefits of skimming Meralco from the top will go straight to the pockets of powerful people using the President as their prop for a grand fraud.