Thursday, July 24, 2008 ERC told to stop approving power rate hike
MANILA Representative Amado Bagatsing said the Energy Regulatory Commission (ERC) must desist from approving any more power rate increase petition by the Manila Electric Company (Meralco) until after a Supreme Court (SC)-mandated audit of Meralco's financial books has been undertaken.
"Meralco is insatiable. Its greed knows no bounds!" fumed Bagatsing. "The ERC gave it a hand in January. Now, Meralco wants the entire arm - our collective arm," he said.
Bagatsing was referring to the P8.8 billion in cost recoveries the ERC allowed Meralco to pass on to consumers in an order last January 18, and the P12.7 billion more in "claimed under-recoveries" Meralco wants the ERC to also approve.
In all, Meralco had filed 10 petitions before the ERC to recover a total of P21 billion, representing its alleged under-recoveries from August 2006 to May 2007.
The P8.8 billion resulted in an increase of 16.62 centavos per kilowatt hour in the generation charge component of customers' electricity bill.
Bagatsing noted that the ERC and the Commission on Audit (COA) have yet to comply with a 2006 SC order for COA to go through Meralco's financial books to justify its 2003 power rate increase
The lawmaker cited the complaint of a cause-oriented group, the National Association of Electricity Consumers for Reforms (Nasecore) that the ERC has yet to ask COA to audit Meralco.
The SC said the ERC must ask COA to do the audit, but the ERC has yet to make a formal request to COA, according to Nasecore.
"The subject of the SC order may be different from the under-recoveries being sought by Meralco from the ERC. But the underlying principle laid down by the SC, that Meralco must be asked to fully justify its power rates, should apply to Meralco's rate hike petitions," Bagatsing said.
He reminded the ERC of its mandate to protect the public from unjustified power increases and its duty to ensure that utilities like Meralco comply with the terms of their franchise and the Electric Power Industry Reform Act (Epira), including providing their captive markets power at the least cost to consumers.
Bagatsing had filed a bill at the House of Representatives seeking to repeal the Anti-Electricity Pilferage Act, which has enabled distributors like Meralco to saddle consumers with system loss charges.
System loss refers to electricity lost from pilferage and from distribution inefficiencies.
"Why should we pay for pilfered electricity and for power lost due to Meralco's inefficiencies? System loss is part of the risk of this kind of business, therefore Meralco must bear its cost," he said.
"Meralco rakes in the profits, while passing to us its losses. Can there be a more unfair situation than that?" the legislator asked.
Earlier, Bagatsing said many of his constituents in Manila see Meralco as the biggest pilferer of electricity in the country for not paying for the average of half a billion pesos worth of power it uses each year.
Meralco's electricity consumption in its offices is also passed on to consumers. (JMR/Sunnex)
