• Good sense in the House

    3

    Speaker Feliciano Belmonte Jr. deserves to be commended for adding his voice to those who castigate the Manila Electric Company (Meralco) for greedily imposing an outrageous and unjustifiable rate increase.

    The Speaker joined two congressmen, who have been at the forefront of denouncing Meralco and challenging the P4.15 per kilowatt-hour hike it began to charge consumers in November. These two are Rep. Elpidio Barzaga of Dasmariñas City and Rep. Neri Colmenares of Bayan Muna party-list.

    Meralco claims that without the rate increase power generating companies would not be able to build new plants and make improvements on their facilities. If that happens, we the public are warned, there will be long brownouts and even blackouts.

    But those who know the country’s electric power situation know that the astronomical rate increase Meralco has imposed was deceitfully arrived at.

    Meralco and the electric power producers created a pseudo-crisis situation, which the government’s Energy Regulatory Commission and the Department of Energy agreed with and did nothing. They allowed the major generating companies to shut down their plants almost all at the same time, thus creating a potential or actual shortage.

    The Speaker blasted at Meralco for increasing its rates even if the country had ample power supply. He and other lawmakers heard Energy Secretary Jericho Petilla testify at the House Committee on Energy that in 2013 there was enough power and yet Meralco sought a P4.15 per kilowatt hour power rate hike. This rate hike is more than double the P2.00 per kilowatt hour rate increase Meralco sought in 2010 when there was an actual power shortage.

    Seeking Energy Regulatory Commission (ERC) approval for the P4.15 per kilowatt hour power rate hike in 2013, Meralco said it had been forced to buy electricity for distribution to its consumers for a very high price at the Wholesale Electricity Spot Market (WESM) because Malampaya had shut down and simultaneously eight other plants were not in operation because some had the scheduled and extended maintenance shutdowns and others suddenly shut down without warning.

    “Why do these power plants have to schedule their maintenance all at the same time and coinciding with the Malampaya when they could have done it on a staggered basis? As for Meralco, there were scheduled outages. They could have devised a plan to address the situation in advance. But they didn’t do it. Why the lack of concern?” Belmonte asked.

    “Where is their [Meralco’s] foresight? They could have alleviated the situation, ask the power plants to take turns in scheduling outage. But Meralco announced their rate hike even before they asked the approval of the ERC as if the approval of the ERC was a long foregone conclusion,” the Speaker angrily said.

    Because of this Rep. Elpidio Barzaga remarked that Meralco’s P4.15 rate increase must be rejected. This is what the Supreme Court has done, albeit, temporarily. The High Court issues a temporary restraining order (TRO) halting the implementation of the Meralco rate hike that the ERC had approved last year.

    “In the spirit of transparency and accountability, Meralco should present documents that states the actual increase in the generation cost specifying the kilowatts purchased, the amount paid to the power producing plants in order to justify the amount of P22 billion which it seeks to recover form its 3.5 million customers,” Barzaga said.

    Rep. Neri Colmenares of Bayan Muna agreed with Barzaga. He saw that Sec. Petilla’s disclosure of no shortage in 2013 only proves that Meralco and the power producers were in collusion.

    “The fact that the Department of Energy admitted that there was enough supply means that the price of electricity drastically and substantially went up not because there was an increase in the generation costs or a lack of supply. It was because energy players colluded or manipulated the price to go up,” Colmenares said.

    These congressmen’s good sense is proved by Meralco’s admission that it dictated the P62 per kilowatt hour price that the Aboitiz Power subsidiary Therma Mobile (TMO) power quoted for bidding last November when the Malampaya natural gas complex was shut down.

    The Manila Times originally published this shocking revelation last week. Our P1 banner yesterday “Meralco confirms it dictated power prices” was about Meralco director and general counsel Rey Espinosa’s admission to the House Committee on Energy hearing on Wednesday that it was Meralco that instructed TMO to lay down the P62 per kWh price.

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    3 Comments

    1. The Balance Sheet of Meralco also does not show the details of fixed assets which are said to be in need of replacements. Meralco claims that if they don’t charge high prices, it cannot replace the equipment or build new plants. I wonder why Meralco is hiding their Fixed Asset details to the public. My suspicion is that their net income will show overpricing to such a degree wherein equipment can be replaced early and long before they get fully depreciated. It is being used as an excuse to maintain high prices. But the people cannot prove them wrong because their annual report does not show those fixed assets in need of replacements.

    2. Congressmen should take this opportunity to require Meralco and Power Generating Firms to submit their transparent annual reports that show the details of annual revenue, cost, and expenses in order to make those facts as basis for proving violation against Republic Act 10623 – The Amended Price Act. Current Annual Reports released to the public are not transparent. ERC could not have known if prices were right or wrong based on the Annual Reports, because those were not transparent.

      Ask for financial reports that are transparent from the time EPIRA became a law to the present, 2001 to 2013. It is in those hidden details where the Filipino People can certainly establish OVERPRICING for years. Without those facts, they can get away with exhorbitant profits and continue to deceive the public with high prices.

    3. Anima A. Agrava on

      Meralco and its partners in the power industry have been driving away foreign investors from the Philippines. By making electricity cost in the Philippines prohibitive they have restrained investments–and prevented jobs from being created. They should be charged with economic sabotage.