Meralco won’t get off lightly despite rate slash, say solons

The Manila Times
March 20, 2014 10:20 pm 
by Reina Tolentino and Kristyn Nika M. Lazo Reporters 

Manila Electric Company’s (Meralco) move to reduce its rate increases does not mean the rate adjustments are legitimate, lawmakers said on Thursday. 
“The recalculated rate hike validates [the opinion] that the previous proposed power rate hike was gravely exorbitant and erroneous. 
However, it doesn’t mean that the new adjusted rate hike, albeit lower than the original proposed rate increase, is legitimate, rational and reasonable,” Rep. Barry Gutierrez of Akbayan said. 
On Wednesday, Meralco reduced its rate in compliance with an Energy Regulatory Commission (ERC) order to lower wholesale prices for November and December last year. 
Meralco said the power distributor’s January bills will reflect the cuts in generation charges by 70 percent to 80 percent from P4.56 per kilowatt hour because of “recalculations made by the Wholesale Electricity Spot Market [WESM].” 
But Gutierrez said the rate recalculation would not have been necessary if the ERC did its job as a regulatory body. 
He said the ERC acted “like Meralco’s mere accountant” and challenged the commission to dismiss the utility firm’s rate adjustment application. 
He said Meralco should justify its petition to increase rates when it files for a new application. 
Rep. Neri Colmenares of Bayan Muna said Meralco’s mere filing of a motion for rerunning and recalculation with the ERC is a “fatal admission” that the company did overcharge its customers. 
“The people do not deserve to pay any rate increase because an increase no matter how small is still a burden to consumers,” Colmenares said. 
He noted that the recalculated rates should not be imposed because they should first go through scrutiny at a public hearing. 
Rep. Walden Bello of Akbayan proposed that the ERC investigate if power companies conspired to drive prices up. 
“With the discovery of ERC that there, indeed, was an unreasonable and irrational increase in power supply rates, it inadvertently admitted that there is a lapse on the conduct of the power market that requires a thorough investigation,” Bello said. 
Meralco had insisted that there was no overpricing because it charged consumers on the basis of WESM prices. 
But Colmenares said Meralco already admitted to overcharging when it confirmed during oral arguments at the Supreme Court that it ordered its power supplier Therma Mobile to offer electricity at P62 per kWh at the WESM at least 25 times. 
“This order resulted in the jacking up of electricity rates and the P4.15 increase that they were trying to pass to consumers,” Colmenares said. A Malacañang spokesman said electricity prices will definitely drop as the ERC cracks the whip on erring power generators. 
Presidential spokesman Edwin Lacierda noted that Meralco rollbacks will come “naturally.” “There is a natural progression since the previous rates were deemed high by ERC. 
Consequently, Meralco will have to reduce their rates,” Lacierda told The Manila Times. In a statement on Thursday, Meralco said it has asked the ERC how it can recover the adjusted rates for the January bill. 
The company said it will propose a recovery scheme based on the customers’ best interest. 
For December, Meralco based its recalculation on validated WESM rates from the revised billings and recomputed the cost of power replacement for Sual and Masinloc plants. Meralco said the WESM rates for December dropped from P36.08/kWh to P8.33/kWh “after the PEMC recalculation.” 
Joe Zaldarriaga, Meralco spokesman, earlier said the PEMC has not yet provided invoices for the November supply month because of the Supreme Court TRO. 
“[We] assure customers that the computation of the generation charge shall be transparent and that whatever adjustment that will be made as a result of the ERC mandated recalculation will be fully reflected in their bills,” Meralco said. With a report from Joel M. Sy Egco source