Palace urges consumer groups to question Meralco rate hike

MANILA, Philippines – Admitting that the timing of the rate hike approved by the Energy Regulatory Commission (ERC) to Manila Electric Co. (Meralco) was questionable, Malacañang yesterday called on consumer groups to take the initiative to seek reconsideration of the decision.

Executive Secretary Eduardo Ermita said that the impact of the increase on ordinary consumers should be studied in light of the ongoing global financial crisis that has affected the country.

“Precisely. We need to take a look at that because we all know that while we are discussing the impacts of the global economic and financial crisis, here comes the approval given by the ERC,” Ermita said.

He noted that while the ERC also approved a refund to Meralco customers to go with the 36 percent rate increase, there is a need to study closely the impact of the increase on Meralco customers.

The ERC approved a two-year-old petition of Meralco for a 36 percent increase in its basic rates, which would take effect next month.

For the average consumers or those who use up to 200-kilowatt hours of electricity a month, they will now have to pay 77.84 centavos per kWh from 57.29 centavos per kWh or a 20.55-centavo increase.

Supposedly to reduce the impact of the increase on the consumers, the ERC also approved a refund to Meralco customers of about P3.1 billion for over-recoveries in June 2003 to December 2006 related to foreign exchange adjustments.

This would translate to a refund of 14.61 centavos per kWh a month for a year.

The decision of the ERC came as a surprise to many as Malacañang has initiated several moves to bring down the rates of Meralco.

President Arroyo has on numerous occasions criticized Meralco for having the highest rates in the country.

Last May, the President ordered the Department of Trade and Industry to file four petitions before the ERC aimed at bringing down Meralco rates.

The four petitions are: To enjoin Meralco from buying electricity from the WESM during peak hours; to ensure preferential treatment for households and lower-intensive industries in the distribution of National Transmission Corp. charges; to prohibit Meralco from charging its system loss as a separate item; and to require Meralco to charge the same rates as the Visayan Electric Co. (VECO), Cebu Electric Co. (CEBECo) or Davao Light.

Mrs. Arroyo noted that the distribution charges of VECO, CEBECO and Davao Light, “along with all 140 utilities and cooperatives are all lower than Meralco.”

Ermita, who was involved in the discussions about the petitions at the time, said that Malacañang would also be looking at the status of these petitions.

‘P3.9-B refund won’t ease burden’

Meanwhile, the P3.9-billion refund the ERC ordered Meralco to pay back its customers will not ease the burden of the consuming public, President Arroyo’s lawmaker-son said.

Pampanga Rep. Juan Miguel Arroyo, chairman of the House committee on energy, said the refund order of ERC chairman Zenaida Ducut, his townmate in Lubao and predecessor in Congress, “won’t serve its purpose to appease the public.”

“The ERC should present clearly the certifications that would justify the new distribution supply and metering charges,” the lawmaker said.

Anakpawis Rep. Rafael Mariano called the new rate hike “power-tripping,” or “a whim or caprice of a utility to impose another burden on consumers.”

The Meralco rate hike, Mariano said, renders “useless” the ERC refund order.

“Even without the increase, people are now suffering from the unjust pricing methods of Meralco,” he added, referring to the multiple charging of the value-added tax, a tax on tax (franchise tax), systems loss charges, and other hidden charges.

“This shows how helpless Mrs. Arroyo is in a deregulated power industry, and callous in the face of the worsening economic turmoil,” said Mariano, co-author of House Bill 3010 or the measure seeking to repeal Republic Act 9136, the Electric Power Industry Reform Act.

Government Service Insurance System (GSIS) president and general manager Winston Garcia also criticized the ERC for approving the Meralco rate increase.

He urged the ERC to immediately reconsider its decision, saying the increase was unreasonable.

The increase in distribution charges for other consumers are 31.5 percent to P1.1522 for 301-400 kWh monthly use; 29 percent to P1.5046 for 301-400 kWh, and; 27.5 percent to P2.1186 for 401 kWh and above.

Big commercial and industrial customers of Meralco will also pay higher rates of P140.83 per kilowatt-hour from P119.44 per kWh.

Garcia said Meralco’s rates are already high and should not have been granted a further increase.

Meanwhile, the Commission on Audit (COA) is expected to complete its audit on the books of Meralco next January.

“The COA audit has 120 days or four months to complete the process,” Meralco head of regulatory management office Monico Jacob told a press conference yesterday.

“They (COA team) are here. They are looking at both 2004 to 2007 (books of Meralco),” Jacob said.

So far, he said “COA has not yet tapped Meralco for any query or help on the audit of the power distribution firm’s financial records,” he said. – With Delon Porcalla, Donnabelle Gatdula, Iris Gonzales