• No Meralco refunds for now, says ERC

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    THE Energy Regulatory Commission (ERC) said it cannot order Manila Electric Co. (Meralco), the country’s largest distribution utility, to refund its customers because the issue on the reported overcharging is still pending with the Supreme Court.

    “We might violate the order of the Supreme Court if we act on the call at this point in time and we do not want to do that,” ERC executive director Francis Saturnino Juan told reporters.

    Militant group Bagong Alyansang Makabayan (Bayan) has asked ERC to order Meralco to refund its customers after the commission’s investigating unit (IU) found that the distribution utility committed market abuse in December 2013.

    Besides Meralco, 12 other generation companies (gencos) were also found liable for anti-competitive behavior that led to a spike in electricity rates of P4.15 per kilowatt hour (kWh) during the period.

    Bayan secretary general Renato Reyes said majority of the customers had already paid their electricity bills reflecting the first tranche of the record-high rate hike of P4.15 kWh before the Supreme Court issued a temporary restraining order (TRO) stopping the increase.

    Calling the situation “unjust,” Reyes said consumers should not be made to suffer since it was the gencos and Meralco that violated the rules of the Wholesale Electricity Spot Market (WESM).

    “Why should we be denied a refund arising from Meralco’s collection of an additional P2.00/kWh in December 2013?” Reyes said.

    The P4.15 per kWH increase was supposed to be implemented in three tranches in December 2013, and February and March 2014 but was eventually stopped by SC.

    Juan said ERC still has to wait for the decision of the high court before acting on the appeal of Bayan.

    Meralco spokesman Joe Zaldarriaga echoed Juan, saying the refund “is the subject of a Supreme Court TRO.”

    “We are just awaiting the Supreme Court and ERC’s corresponding instruction on the issue,” he added.

    He pointed out that the refund involves generation costs that are pass-through charges for distribution utilities like Meralco.

    “The payment for generation charges does not accrue to Meralco,” Zaldarriaga stressed.

    William Pamintuan, head of Meralco’s legal department, denied that the company committed any acts that may be deemed anti-competitive behavior.

    “The records will bear that Meralco complied with applicable market rules and did not engage in any anti-competitive behavior in its supply contract with Therma Mobile,” said Pamintuan.

    Meanwhile, Larry Fernandez, Meralco vice president and head of Utility Economics, said they are expecting a lower generation cost for this month. He said they are projecting a power rate reduction of from 15 centavos to 20 centavos per kWh brought about by lower generation costs due to the cheaper oil used by generation companies during the Malampaya gas field shutdown.

    Fernandez said the reduction will eventually offset the 4 centavos per kWh increase that was earlier approved by the ERC to allow it to collect its under-recoveries in the previous years.

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    5 Comments

    1. Mayumi Pinay on

      Generation Companies colluding to set high market prices. That is the reality at our WESM — few producers sell based on available supply.

    2. The refund will eventually happen so all we need to do is wait. It’s not like we can just go about and behind the law. Just like what the article says, this is just a temporary thing. The refund will eventually happen and it’s not like Meralco intended the overcharging. They’re just the messenger or deliverer of electricity to the end users like us. They DO NOT produce electricity as others believe it to be.

    3. Prof. Pompadour on

      Typical reaction of the rabid communist: All are guilty until proven innocent. First of all, the ERC findings only said these companies MAY be liable for collusion. Secondly, while ERC includes Meralco, the Philippine Electricity Market Corp. does not, knowing fully well that Meralco is a distributor, not a power generator.

      More evidence of Bayan’s gross ignorance (or is it disregard for the facts?) is their demand to nullify the previous price hike with the end result that Meralco will no longer be able to issue the refund they are demanding. Instead of Bayan shooting the messenger (distributor) for the sake of political capital and ERC pushing for pogi points, they should punish the guilty gencos. These are the guys who should refund Meralco.

    4. Maria Stevens on

      It seems to me that the ERC are as dishonest and disreputable as Meralco..Any properly run organization would have refunded the money immediately instead of which Meralco and their partners in crime the ERC hide behind the laws of the land so as to avoid their obligations to their long suffering customers…