Veco asked to review financial statements-A A +A
Wednesday, April 23, 2014
THE Cebu City Council wants the Visayan Electric Co. (Veco) to review its financial statement to make sure it has not overcharged customers in its franchise area.
This, after the council learned that the Manila Electric Co. (Meralco), a distribution utility like Veco, has over-recoveries from pass-through charges it is collecting from customers.
These pass-through charges are fees paid by the customers for power generation, transmission, system loss, lifeline subsidy, senior citizen subsidy, missionary electrification and environmental charge, among others.
Refund, if warranted
Councilor Nestor Archival, who is the head of the council’s committee on energy, yesterday said customers should only be charged the correct power rates.
If Veco is discovered to be overcharging, it should refund customers, Archival said.
“Veco, which is similarly capacitated with Meralco, should give an accounting from the start of its collection of various under- or over-recoveries in their pass-through charges, and to refund the same if there is anything to refund to the consumers within their franchise area,” he said.
In the case of Meralco, Archival said, he learned from a newspaper report that it has refunded consumers in its franchise area the amount of P714.33 million for over recoveries of pass-through charges.
Aside from asking Veco to review its financial statement, the legislative body also wants Veco to appear in a public hearing together with officials from Power Sector Assets and Liabilities Management (Psalm) and the Energy Regulatory Commission (ERC) to apprise the council on double transmission charging concerns.
Archival said that in a decision dated March 10, 2010, the ERC found out there was double charging in transmission line cost by Psalm to Meralco.
“Customers of Meralco were given refunds of around P10 billion worth of transmission line costs that were overcharged by the government-run Psalm starting in 2006,” he said.
Archival also wants the Department of Energy to appear before the council to share results of the consultative meetings it has conducted on amending the Electric Power Industry Reform Act (Epira) of 2001.
He said there is a need to amend the Epira as its purpose, which is to protect consumers from soaring electricity costs, has not been realized.
He pointed out that among major cities in Asia and Oceania, Cebu ranks fourth in terms of electricity rate, or P8.55 per kilowatt-hour (kWh). Manila comes in first with P10.35 per kWhr, followed by Singapore at P9 per kWhr and Sydney at P8.55 per kWhr.
The council has already scheduled the public hearing on May 14.
Published in the Sun.Star Cebu newspaper on April 24, 2014.