The Energy Regulatory Commission (ERC) has castigated the Panay Electric Co. (Peco), the sole electricity supplier in Iloilo City, for failing to refund P631 million in overbilling to its customers.
The ERC move added to Peco woes following multiple complaints recently from customers over bills that rose by as much as 1,000 percent under a new metering scheme.
Officials of the ERC told the House committee on legislative franchises that Peco had failed to fully comply with a directive in 2004 to refund the P631 million in overbilling discovered after customers complained that they were billed for unused electricity.
The complaint from the ERC further complicated Peco’s situation and fueled a stand by many members of the House legislative franchises committee to deny Peco the renewal of its 90-year-old franchise which would expire in January 2019.
1,000% rate hike
Iloilo City Councilor Joshua Alim informed the House committee that the ERC also needed to step in early this year to address multiple complaints from Iloilo residents that the utility firm suddenly raised rates by as much as 1,000 percent without informing consumers of the reason.
Alim informed the House committee about a resolution in the Iloilo City Council asking the national government to deny Peco a new franchise and for the government to take over the operations of the utility.
Councilor R. Leone Gerochi, author of the resolution, noted that in several cases lodged with the ERC by cause-oriented groups, Peco was “declared to have overcharged its customers on several occasions and seems to have a penchant for overbilling its consumers.”
No compliance
Gerochi disclosed that Peco has yet to fully comply with the ERC directive to refund the P631 million it overbilled its customers.
“There is a lack of transparency in so far as the operations of Peco are concerned,” the resolution said, adding that the company has been operating for 90 years.
High power costs drove the country’s biggest business group, Philippine Chamber of Commerce and Industry (PCCI) to recommend that government consider subsidizing electricity rates.
In a recent statement, PCCI said a competitive power rate has been elusive, even 16 years after the passage of the Electric Power Industry Reform Act (Epira) which was meant to ensure reliable and affordable power supply.
“We are all aware that in most countries, power rate is somehow ‘subsidized’ in one form or another simply because competitive power rate is the gateway to investments and employment,” the group said.
Power in agenda
This came as the PCCI was set to hold the 44th Philippine Business Conference and Expo on Oct. 18 and 19.
The conference will include a discussion on power rates in the Philippines, according to PCCI officials.
The PCCI said other countries have made the goal of achieving a competitive power rate a national strategy. —WITH A REPORT FROM ROY STEPHEN C. CANIVEL