Solon seeks probe on ERC, Meralco WACC; utility touts low, fair rates

A lawmaker is looking to question Energy Regulatory Commission (ERC) officials on their computation of power distribution utility Manila Electric Company's (Meralco's) weighted average cost of capital (WACC) which has stayed at 14.97% since 2015.

Laguna Representative Dan Fernandez, in a privilege speech, said Meralco’s WACC should only be 9.62% given that Meralco's power distribution already covers 70% of Luzon.

“Hindi makatarungan ‘yan sa atin pong 7.6 million Filipinos na siningil nila ng sobra-sobra mula nang 2015 hanggang ngayon," said Fernandez.

(It is an injustice to charge 7.6 million Filipinos such an excessive rate which has been in place since 2015.)

"The ERC is there. We need to invite them, all the commissioners, all the chairpersons. They must be invited here to be investigated because they have to be held responsible. Why? They never computed [WACC again since 2015].”

“What did Meralco say? They said Meralco cares. If they really care and they had the moral decency, they should have told ERC that it has been [almost] 10 years, and we haven’t computed [a new WACC]. They (Meralco) need to refund us with cash. I hope that this Congress will act on this, and I hope that this [speech] will be referred to the Committee on [Legislative] Franchises and the Committee on Public Order for us to find out the culpability of people who have been liable for this irresponsibility,” Fernandez added.

Meralco spokesperson Joe Zaldarriaga, however, disputed Fernandez's claims and said Meralco’s rates were at par with the service it provides.

“Our rates and service are monitored strictly by the regulator and records show that we have always outperformed and have more than complied with the level of service expected from us,” Zaldarriaga said in a statement to GMA News Online.

“As far as our rates are concerned, records will also show that at current levels Meralco's charges are lower than many jurisdictions in the country, which is the reason why some areas are clamoring for Meralco's level of service,” Zaldarriaga added.

Senate Deputy Minority Leader Risa Hontiveros earlier had also commented on the WACC rate, which, at 14.97 percent, was "shockingly excessive” compared to the WACC rates allowed in neighboring countries, such as Malaysia (7.5%), Thailand (7.2%), and Indonesia (2.3%). — DVM, GMA Integrated News