Manila Electric Co. (Meralco) slashed its electricity prices as the power distributor presented on Wednesday its rate adjustments in compliance with the order of the Energy Regulatory Commission (ERC) to lower the wholesale prices for November and December last year.
Joe Zaldarriaga, Meralco spokesperson, told The Manila Times in a late night phone interview that the company’s January bills will reflect reductions in generation charges by 70 to 80 percent from the initial P4.56 per kilowatt hour because of “recalculations made by the Wholesale Electricity Spot Market (WESM).”
Zaldarriaga said the December generation charge rate of P3.44/kWh, however, is still due for recalculations as the company has “not yet received the invoice from the Philippine Electricity Market Corp.”
Meralco had attempted to raise its generation charge to P4.15/kWh for December, to which the Supreme Court responded by issuing a temporary restraining order (TRO), blocking the rate hike for that month. As a result, Meralco told consumers to pay their December bills using the November rates.
Zaldarriaga clarified “there was no overpricing” done by Meralco to consumers as it only charged the rates imposed by the generation companies to WESM, which Meralco simply passed on to consumers.
Betty Siy-Yap, Meralco chief financial officer, said that the reduction in generation charges—from power generating companies to Meralco—is still subject to evaluation by the ERC before any of it is imposed.
Siy-Yap said after recalculations, the generation rates, combined with all taxes, transaction charges and subsidies, stood at P6.12/kWh for January and P5.93/kWh for December.
“For November, we will have to wait for the SC [ruling]. For December, we’ll only charge [the lower rates] to the consumers when the ERC approves our recovery,” she said, referring to the untouched P3.44/kWh December rate.
“For [the January rates,] we have already filed for a recovery so we’ll have to wait for the ERC’s approval of the start of the recovery for January. For December we’ll wait for the SC’s [response to the TRO]. The ERC will then have to determine the approval of the recovery for both months,” Siy-Yap added.
The reductions in consumer bills, however, do not absolve Meralco of overcharging its customers, a group of party-list congressmen said on Wednesday.
Reps. Walden Bello of Akbayan, Neri Colmenares of Bayan Muna and Terry Ridon of Kabataan want Meralco to pay its customers twice the P1.72/kWh they said it overcharged from November to December last year.
The three made the call after the Philippine Electricity Market Corp. (PEMC) announced that Meralco bought electricity at excessively high prices at the West Electricity Spot Market (WESM).
Meralco used the high prices to justify its petition for a record rate increase late last year.
The PEMC, which runs the spot market, said the WESM price in November was set at P25/kWh when it should have been P6/ kWh.
The following month, the WESM price P28/kWh when it should have been P6.24/kWh.
“We should fine Meralco twice the amount it overcharged consumers. It is important to hit that greedy monopoly where it hurts: in the pocket,” Bello said in a text message.
“We were asking the Supreme Court to find them [Meralco] in contempt, refund plus interest, and pay damages to the people at double the amount they imposed. The people should not pay but those guilty of collusion should,” Colmenares, one of the petitioners who questioned Meralco’s P4.15/kWh rate hike before the Supreme Court.
Meralco asked for the P4.15—the highest in Philippine history—saying it needed to make up for higher electricity prices from the month-long Malampaya natural gas plant shut down for maintenance beginning last November.
Not long after Malampaya went off the grid, at least eight other plants cut off power.
“All allowable fines against Meralco and power generators should be imposed, including a review of the Meralco franchise,” Ridon said.
He called for a thorough review of WESM rules to determine if the market checks against market abuse. If it does not, WESM should be abolished, Ridon said.
With Malampaya down, the price of electricity in the WESM rose to as high as P62/kWh.