Meralco can adjust rates without further approval, says ERC

The Manila Electric Co. (Meralco) may implement a power rate increase, almost unilaterally and without any further approval, because the computation in a rate hike is based on a formula pre-approved by the Energy Regulatory Commission (ERC).

 

“We will still have to see how much is the rate hike in December but the monthly adjustments of Meralco conforms with the formula we approved,” ERC executive director Saturnino Juan told GMA News Online on Thursday.

 

He said the ERC requires distribution utilities to submit monthly reports, which include computation adjustments and data supporting the increase or decrease in power rates, which will be reviewed by the commission.

 

“Rates can change from one month to the other. If there's a supply problem, it will have an impact on electricity rates,” Saturnino added.

 

Militant groups on Thursday slammed Meralco's move to raise power rates this month, but the power utility said it does not earn from the generation charge included in the monthly bills of customers.

'Corporate greed?'

 

Last Tuesday, Meralco said consumers may see electricity rates spike by as much as P2 to P3 kilowatt per hour (kWh) this month on account of a month-long maintenance shutdown of the Malampaya gas line and forced outage of other major power plants in Luzon.

 

In a statement, Freedom from Debt Coalition (FDC) said the move to increase power rates is “a cruel example of corporate greed in a time of disaster” and “a bitter fruit of privatization.

 

“At a time when our  country reels in one of the worst disasters in our history, and when Filipinos all over the country and abroad as well as the international community... are engaged in a massive outpouring of solidarity... Meralco is more engrossed in protecting, even increasing its profits,” FDC president Ricardo Reyes said.

 

"If Meralco increases its rates by P 3.50 per kWh, consumers who consume 200 kWh will pay P700 more, those who use 300 kWh, P1,050 more, and even higher for those who consume more," he added.

 

But Meralco spokesperson Joe Zaldarriaga said the distribution the company does not earn from the higher pass-through charges that go to the suppliers, like the independent power producers, plants selling to Meralco under the PSAs, and WESM or wholesale electricity spot market.

 

“As a distribution utility, we only reflect the cost incurred by power producers. Hindi sa amin mapupunta ang payment but doon sa mga producers,” Zaldarriaga said in a phone interview.

 

Pass-through charges include generation charge, transmission, taxes, universal charges, and other fees. Meralco’s distribution, supply, and metering charges account for only about 18 percent – on average – of the total electricity bill.

 

Protest vs. Meralco

In a report by GMA's Julius Segovia on “Balitanghali,” the partylist Anakpawis staged a protest in front of Meralco's branch office in Quezon City while Bukluran ng Manggagawang Pilipino and Freedom from Debt Coalition (FDC) rallied in front of the head office in Pasig City.

Anakpawis secretary-general Jun Luna said consumers will have to further tighten their belts as the impending increase in power rates are on the heels of oil and basic commodities price hikes, the report noted.

 

Bukluran also condemned Malacañang for favoring big business and defending the power rate hike as reasonable.

 

On Wednesday, Communications Secretary Sonny Coloma said Meralco's plan to increase its generation charge is reasonable as the cost of electricity is market-driven and depends on demand and supply.

 

Meralco's Zaldarriaga earlier told GMA News Online the range of the power rate hike is "still subject to change," and that the figures were given in response media queries for a ballpark figure. – VS, GMA News