Lawmakers hit Palace for justifying power rates increase

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Militant lawmakers on Thursday hit Malacanang and power distributor Manila Electric Co. (Meralco) for justifying the looming power rate hike set to take effect this month.

Kabataan Party-list Rep. Terry Ridon blasted the Aquino administration’s “penchant for justifying additional burdens to the people” as it defended Meralco’s P2.50 to P3 increase per kilowatt-hour.

“Instead of putting the interest of millions of Filipino consumers that will be affected by the new wave of power rate hikes, the Palace is ironically the one leading its justification. Clearly, the Aquino administration values private interest over the welfare of our countrymen,” Ridon said.

Presidential Communications Secretary Herminio Coloma Jr. said on Wednesday that the government is powerless when it comes to such increases because of the Electric Power Industry Reform Act (Epira) that deregulated the power sector.


“Let’s understand that since the passage of the [Epira], the policy framework for rate setting in the power sector changed. This has become market-driven. This is no different from the changes in fuel pricing,” he said.

Hicap, for his part, called for the removal of the value added tax (VAT) on electricity and the repeal of Epira.

“[W]e urge the national government to temporarily reduce or remove the taxes imposed on power generation, transmission and distribution costs,” the lawmaker said.

He also added that the immediate repeal of Epira will correct the soaring power rates.

“EPIRA is an ‘anti-consumer, pro-corporation’ law. It only managed to increase the profit margins of private power companies.”

Bayan Muna Rep. Carlos Zarate, on the other hand, said that such rate increase is “artificial and contrived” because the maintenance of Malampaya power facility was already scheduled months ago.

“Since the maintenance of the Malampaya power facility was scheduled months ago, it is gravely suspicious why the DOE [Department of Energy] did not find alternative sources to compensate for it,” Zarate said.

“Repairs and maintenance of power plants are scheduled events. There is no reason why they need to increase rates every time they do this. The effect of this is to constrict supply and therefore jack up prices in the spot market.”

In 2011, Meralco posted a consolidated core net income of P14.9 billion, up by 22 percent from 2010. Its consolidated revenues reached P254 billion in 2011 or a 6 percent year-on-year increase. In 2012, it posted a 9 percent increase on its consolidated core net income to P16.3 billion.

Only three private companies currently control 52 percent of generation capacity in the country – San Miguel Corporation’s Global Power, Aboitiz Power Corporation, and the Lopez Group-led First Philippines Holdings Inc.

A typical household consuming 200 kWh would have an increase of P500 to P700 in their electricity bills covering December and January billing cycles. The said hike will affect 5 million consumers in 33 cities and 78 municipalities.

According to Meralco, the increase is a pass-on charge because of the Malampaya natural gas plant’s maintenance shutdown from November 11 to December 10. JHOANNA BALLARAN

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1 Comment

  1. observant nobody on

    the only reason to run to the government regarding this matter, is to push them to finally open up the economy. Get rid of the 60/40 and burn the FDI negative list, and then, just as important: to get out of the way and take their red tape with them.
    More Powerplants, more distributors. And above that, finally a turn in the right direction for this country of ours. How else do you expect cheaper electricity prices, and better quality of living to happen around here?! Praying is not enough my friends! Hopefully someday, you, too will be angry enough..