Refund first before asking for rate hike, Meralco told

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A LAWMAKER on Thursday urged the Manila Electric Company (Meralco) to first complete the refund of P30.2 billion to its customers as ordered by the Supreme Court in 2003 before seeking another power rate hike.

Rep. Arnel Ty of the Liquefied Petroleum Gas Marketers Association (LPG-MA) party-list was referring to the Supreme Court’s ruling in 2003 barring the country’s biggest power distribution firm from charging its income tax obligations to its customers — a policy that Meralco had indulged in from 1994 to 2002. The High Court ordered Meralco to refund its customers P30.2 billion.

The initial deadline to complete the refund payout was the end of 2011, but it was extended by another four years.

“Meralco should first fully settle all refunds due its customers. While Meralco is a private entity, it is also a business that enjoys a privilege granted by the state, by way of a legislative franchise bestowed by Congress, to exclusively distribute electricity in Metro Manila and outlying areas,” Ty, the House deputy minority leader, pointed out.


Meralco has asked the Supreme Court to lift the temporary restraining order (TRO) on the P4.15 per kilowatt-hour power rate hike that was supposed to take effect in December last year.

The company said at the time that the rate adjustment was a result of the month-long shutdown of the state-run Malampaya Natural Gas Plant and the unplanned outages of other power plants.

Earlier this week, the high court extended to 120 days the 60-day TRO it issued in December. It also stopped the power generators from collecting payments from Meralco.

Ty said Meralco is financially capable of settling its refund obligations and shouldering additional generation charges because it is expected to report a net profit of P19.409 billion for 2013 based on estimates by online stockbroker COL Financial Group Inc.

Citing the same source, Ty added that Meralco has accumulated dividends of P43 billion following five years of unbroken profitability: the company posted net profits of P2.8 billion in 2008, P6 billion in 2009, P9.69 billion in 2010, P13.23 billion in 2011, and P17.016 billion in 2012.

“In return for the concession, Meralco—which is engaged in a business highly imbued with public interest—should constantly find ways to provide some economic relief to its customers. The company should not just pass on to consumers every cost of doing business,” the lawmaker said.

“While Meralco is entitled to a fair profit, it should lessen its excessive want for ever-increasing profits and spare its 5.2 million captive residential, commercial and industrial customers from burdensome charges,” Ty added.

Joe Zaldarriaga, Meralco’s corporate communications manager, said the company has not turned its back on its obligation to pay the refund.

“All customers entitled to the refund have received it or have been notified. Over 95 percent of our customers have received their refund,” Zaldarriaga told The Manila Times.

“As for the P4.15 per kilowatt hour power rate hike, that will go to power generation companies, not Meralco. It is a completely pass-through charge. Not a single centavo will go to Meralco,” he added.

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