Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts

Issue No. 22                        July 15-21,  2001                    Quezon City, Philippines

Power Reform Law Faces Court Battle

The constitutionality of the recently-signed Power Reform Law will be challenged before the Supreme Court by the militant Bayan and the National Employees Consolidated Union (NECU). The two petitioners believe that the law violates the Constitution which stipulates that the power industry remain under Filipino control through the State.

BY DANILO A. ARAO
www.bulatlat.com

It is unconstitutional, so it must be repealed.

The National Employees Consolidated Union (NECU) and the Bagong Alyansang Makabayan (Bayan – New Patriotic Alliance) will petition the Supreme Court this week to question the legality of the power reform law.

President Gloria Macapagal-Arroyo signed into law Republic Act No. 9136, also known as the Electric Power Industry Reform Act of 2001 (EPIRA), last June 8 after Congress rushed its approval end-May. Government promised lower power rates once the power sector is restructured and the assets of the National Power Corporation (Napocor) are privatized.

The 42-page petition, a copy of which was obtained by Bulatlat.com, stipulates that the EPIRA violates the Constitution since the generation of hydropower and geothermal power cannot be undertaken solely by individuals or corporations. NECU and Bayan cited Art. XII, Sec. 2 which requires the presence of “co-production, joint venture or production-sharing agreement with the State.”

Given that the power reform law allows even foreign corporations to operate generation facilities, “the norm of full State control (has been) completely ignored,” the petititoners said.

Petitioners also stressed that power generation and supply are public utilities and should therefore be controlled by Filipinos based on Art. XII, Sec. 11 of the Constitution.

Through the power reform law, government claimed the two sectors are not public utilities and should be open to competition. Consequently, the petitioners said that this is obviously “most unsound” because “constitutional restrictions cannot be made to vanish through mere legislation.”

NECU and Bayan referred to Black’s Law Dictitionary which cites electricity as an example of public utility. The latter is defined as “a business or service which is engaged in regularly supplying…commodity or service which is of public consequence and need.”

With this, it does not come as a surprise that “the inherent inconsistency and unreasonableness of the legislation cannot therefore fail to attract attention,” the petitioners said.

Won’t lower power rates

The two groups also argued that the mandated rate reduction of P0.30 ($.0058) per kilowatt-hour cannot be expected to lower power rates. This is because the generation and supply charges are deregulated, free from “intervention from the State.”

“Only the distributors themselves who purchase power directly from the Napocor, not the end-consumers, are assured of benefit from the mandated…reduction,” they added.

As if these are not enough, NECU and Bayan also argued that “while the monopoly status of…huge distribution utilities makes a mockery…of the Constitution, (the power reform law) singles out the small distribution utilities for demonopolization and shareholding dispersal, expressly shielding the bid distribution utilities, holding companies and controlling shareholders listed in the (Philippine Stock Exchange).”

The EPIRA, therefore, discriminates against small distribution utilities by imposing additional restrictions on them, as in the case of a 25 percent limit to ownership of the voting shares of stock. As a result, the equal protection clause and Art. XII, Sec. 19 of the Constitution are transgressed, the petitioners said.

The law cannot help develop a self-reliant and independent economy controlled by Filipinos which is enshrined in Art. II, Sec. 9 of the Constitution, they stressed.

The petitioners argued that the privatization of Napocor assets and liberalization and deregulation of generation and supply sectors only ignored the intention of the framers of the Constitution to prevent foreign economic domination through the nationalization of natural resources.

Through the power reform law, they said, the economy now becomes “hostage to foreign interests” as it commits the Philippines to an “irreversible move away from effective Filipino control of the national economy.” www.bulatlat.com

We want to know what you think of this article.