ERC starts hearing DTI petition for lower power rates

MANILA, Philippines - The Energy Regulatory Commission on Tuesday started hearing the petition of the Department of Trade Industry for lower electricity rates, QTV's Balitanghali reported. GMA reporter Julius Segovia said that during the hearing, the DTI insisted that the Manila Electric Company (Meralco) should refund the system loss it has been passing on to its customers. The DTI said Meralco should not pass its pilferage losses to consumers since it was due to the distribution firm’s “inefficiency to safeguard its franchise from pilferage." It said the law covering systems loss failed to set a cap on the recoverable rate and so the Meralco costumers are entitled to a refund. The DTI also wanted Meralco to expand the coverage of lifeline subsidy to electricity users with monthly coverage of up to 150 kWh per month from the present 100 kWh per month. It is also asking the ERC to order Meralco to stop collecting the lifeline subsidy and increase the discount to marginalized users or expand the coverage of the lifeline subsidy. At present, residential customers consuming 50 kWh enjoy a 50 percent discount, 51 to 70 kWh get 35 percent and 71 to 100 kWh enjoy 20 percent. The DTI proposed to increase the discount to 60 percent, 40 percent and 30 percent, respectively. The DTI said Meralco should not buy from the wholesale electricity spot market (WESM) during peak hours when prices are higher. The television report also said that Meralco, through its lawyer Jose Ronald Valles, scored DTI for singling them out. Meralco said they are not the sole power distributor in the country and the DTI should also check other distributors who are charging their system loss to their consumers. A separate report from radio dzBB said ERC ordered Meralco and DTI to submit their evidence as a marathon hearing will be held from June 16 to June 18. Meanwhile, militant group Bagong Alyansang Makabayan (Bayan) said the refund of the system loss charge should also be applied to other power generators such as the National Transmission Commission, and other distributors, not only to Meralco. "This should apply not just to Meralco but also to other generators, Transco and all other distributors, all of whom have system loss charges. In order to be consistent, the government must also refund the value added tax collected from system loss charges since 2006," Renato Reyes, Bayan secretary general, said in a text message. He added the VAT collected from system loss charges in Meralco could amount to P4 billion. - Amita Legaspi, GMANews.TV