|
Tuesday, May 13, 2008
Meralco defends power rates
MANILA – Power distribution giant, Manila Electric Company (Meralco), stressed that the firm is complying with its obligation to supply its customers in the least cost manner.
“As will be borne out by the records and as can be seen from our website, we have sought to optimize the overall cost of generation and transmission for our consumers. This has resulted in the least cost for our consumers,” said Meralco president Jesus Francisco during Monday’s hearing of the Joint Congressional Power Commission at the Senate.
Arroyo Watch: Sun.Star blog on President Arroyo
He explained that Meralco maximizes its purchases from the National Power Corporation's (Napocor) special low-cost programs, such as the economic zone rate, before it even utilizes its Independent Power Producers (IPPs), such as Quezon Power and First Gas.
Meralco moreover said in March 2008, the overall cost of generation and transmission from the company's IPPs, which supplies about half of its power needs, was P5.25 kWh (kilowatt per hour). In comparison, the combined generation and transmission cost of its other suppliers was P6.37 per kWh.
The power firm also refuted claims that it charges the highest residential distribution rates in the country.
Ivanna dela Peña, Meralco vice president and head for utility economics, said the company's socialized prices are skewed towards favoring small power consumers.
The company's combined distribution, supply, and metering charges to a household using 200 kWh or less is only P1.34 per kWh.
These households numbered more than three million and accounted for three-fourths of all its residential customers.
At the same time, Francisco reiterated that Meralco has always been transparent in all its dealings.
“All the information on Meralco's rates, finances, and services are freely available on its website, www.meralco.com.ph, or even at the Energy Regulatory Commission (ERC),” he said.
He noted that Meralco is closely supervised by the government through the ERC, which has the power to require the submission of documents from Meralco and to open and examine the company's books and operations.
Mismanagement
Senator Miriam Defensor Santiago, chairperson of the investigating committee, attributed the high power rates to “management abuses” on the part of Meralco as well as the lax of regulations on the part of the ERC and Napocor.
She said high power rates cannot be blamed on one entity alone, but it could be pointed to “bad practices on the part of industry players.”
Santiago said the commission would like to identify the people behind the high power rates and be put to justice through imprisonment and fine. According to her, the possible penalties of such abuse can be legislative, corporate, and criminal.
She added that “apparent management abuses and lax regulation” are the reasons why the Philippines has one of the highest power rates in the world. She also said the body would also like to know why the power rates are soaring.
Aside from the blame on Meralco, Santiago also pointed out that the ERC and Napocor are also partly responsible.
The Electric Power Industry Reform Act (Epira) of 2001 was also put into question, with Santiago asking why the prices still have not decreased despite the passage of the said law, the purpose of which is to lower electricity rates in the country.
She said the joint commission wants to know why the sole purpose of Epira was not achieved. The failure to achieve the law hampers the proposing of legislations or amendments to the existing laws and the availing of other remedies.
Given that Meralco operates under a franchise, one of these remedies is for Congress to amend or repeal the franchise “as required by the common good”.
On the corporate side, a remedy can also be to vote out the Meralco managers involved in the stockholders’ meeting set this month.
Another criminal remedy is for the guilty Meralco and Napocor officers to be charged with the crime of “combination in restraint of trade,” which is a conspiracy “for the purpose of making transactions prejudicial to lawful commerce, or of increasing the market prices.”
Santiago also divulged that the PowerCom and the ERC -- both created for the purpose of Epira -- have failed to decrease power rates.
No takeover
Government Service and Insurance System (GSIS) president Winston Garcia, who was one of the resource persons at the hearing, echoed the statement of Santiago.
Garcia denied that GSIS was interested in taking over Meralco, but he said he only wanted the Lopez group to make some adjustments in their management style. He said as a shareholder of the power firm, GSIS has a right to intervene in the way things are managed.
He said they are trying to come up with common ground with the Lopez group, adding that they are “not anti-Lopez” but “are against how management of Meralco is being done right now”.
Garcia wants a more competent and professional management.
According to Press Secretary Ignacio Bunye, it has not crossed the mind of the executive department to consider a takeover on Meralco.
“The President (Gloria Macapagal-Arroyo) herself has clarified this, that the only objective is to get the information that is required to satisfy the needs of the customers,” he said.
He said the important thing in all these discussions and hearings at the Powercom and the ERC is that it ends in the “bringing down the rate of electricity”.
“That’s the name of the game because everything is going up because of power and therefore all these things, these talks with GSIS, the talks about the ERC petition submitted by DOE (Department of Energy) and DTI (Department of Trade and Industry) should resolve once and for all the issue of how they should bring down the rate of electricity that’s very important,” he said. (Sunnex)
For more Philippine news, visit Sun.Star Bacolod. (May 13, 2008 issue)
Write letter to the editor. Click here. |
|
|
|
[return to top]
[home]
|
|
