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Solon claims stopping power rate hike won’t hurt Meralco

COMPANY SAYS IT DOESN'T EARN FROM PASS-ON CHARGES
/ 08:49 PM October 22, 2021
Solon claims stopping power rate hike won’t hurt Meralco

PHOTO/EDWIN BACASMAS

MANILA, Philippines — A lawmaker has claimed that the Manila Electric Company (Meralco) would not be affected if the impending power rate hike is suspended, saying that the power service provider could absorb some items like pass-on charges.

Bayan Muna Rep. Carlos Zarate on Friday accused Meralco of maintaining a monopoly within its franchise areas, claiming that the company sources its supply from sectors that are alleged to be either sister firms or companies partially or wholly owned by Meralco.

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“Itong mga pag-increase ngayon na sinasabi ng Meralco na, for example na pass on charges, puwede i-absorb ito ng Meralco,  hindi naman ito magreresulta sa pagkalugi ng Meralco.  In fact, almost monopoly na ang kanyang franchise area,” Zarate said in a statement.

(These increases mentioned by Meralco, like for example, the pass-on charges, can be absorbed by Meralco, and it would not result in a loss of income.  In fact, Meralco’s franchise area is almost a monopoly.)

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“Ang counter argument naman natin diyan napakaraming generation companies na pinagkukunan ng Meralco  ng kanyang supply at mga sister companies if not 100 percent owned at least partially owned ng Meralco. So, ito rin ‘yung nagpapasa ng napakalalaking generation cost na eventually pinapasan ng ating mga consumer,” he added.

(Our counterargument to their defense is that there are a lot of generation companies where Meralco sources electricity from, which are its sister companies — and if not 100 percent owned, at least partially owned by Meralco itself.  So this is also what provides a high generation cost that consumers eventually shoulder.)

But according to Meralco vice president and corporate communications head Joe Zaldarriaga, the company has been transparent regarding how power rate increases are made — and subsequently approved by the Energy Regulatory Commission (ERC).

Zaldarriaga said in a separate statement sent to reporters on Friday that they do not benefit from pass-on charges because the recent electricity rate increases were due to a higher transmission charge — which goes to the National Grid Corporation of the Philippines (NGCP).

“As a highly regulated company, Meralco ensures that all of its power supply contracts and rate adjustments undergo a confirmation process, which includes public hearings, and approval by the ERC. Contrary to what is being stated by some groups, which obviously lacks factual basis, Meralco reiterates that it does not benefit from pass-through charges and power rate hikes,” Zaldarriaga said.

“Electricity rates in October were mainly caused by higher transmission charges which go to the NGCP and which make up for 10.1 percent of a customer’s electricity bill,” he added.

Aside from this, Zaldarriaga stressed that only the distribution charge, which makes up around 19 percent of a customer’s electricity bill, goes to Meralco.

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He said that the distribution charge has not changed for 75 months now.

“Only the distribution charge is billed by Meralco, and such cost represents only around 19% of the total bill. It should be noted that the distribution charge has remained unchanged for 75 months now after registering a downward adjustment in July 2015,” he said.

“We, in Meralco, have always been transparent to the public from day one, and we assure our customers that besides our promise of keeping the lights on, we continue to look for more ways to ensure that our customers get the least cost possible,” he added.

Last October 9, it was reported that Meralco customers would have to pay additional 2.83 centavos per kilowatt-hour (kWh) in October — the seventh straight month where the company increased its charges.

This means that if a household gets billed for using around 200 kWh, an additional P6 may reflect in the monthly bill.  All in all, Meralco’s rate increases have amounted to 81.79 centavos per kWh.

READ: Meralco customers to pay higher power bill in October 

READ: Meralco sets 10-centavo hike 

Zarate said that the latest wave of rate hikes should be stopped, as high electricity prices in the country not only affect households but also scare investors away.

“For as long as hindi talaga maipababa ‘yan, ‘yan talaga ang magpu-pull down sa pag-bounce back ng ating economy. However, you will entice investors to come in ‘yung nga inaasahan mong mga investors at maghahanap sila kung saan mas favorable sa kanilang atmosphere… ‘yan ang sinasabi lagi ng mga investors kaya hindi ganoon  ka-competitive ang Pilipinas,” he added.

(Our inability to bring electricity rates down is what’s hampering our economy from bouncing back.  However, you will entice investors to come in but the investors you expect are already finding a more favorable environment.  That is what investors say that’s why the country is not that competitive.)

He also expressed doubts about whether Meralco lost income during the COVID-19 pandemic, which affected several industries in the country.

“Even despite pandemic, nabalitaan ba natin na nalugi ang Meralco,  siguro medyo nabawasan ang profit pero profitable pa rin siya but compared to ordinary Filipinos, for example, napakalaki ng nawala sa kanila during pandemic.  So ang ating panawagan paulit-ulit sa Meralco na puwede nilang i-delay o i-absorb na ‘yan,” he added.

(Despite the pandemic, have we heard of Meralco losing income?  Maybe they lost some profit, but it is still profitable compared to ordinary Filipinos who lost a huge chunk of their income during the pandemic.  So our call is that they can delay or absorb the additional charges.)

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TAGS: Bayan Muna, distribution charge, electricity rate, Joe Zaldarriaga, Manila Electric Corporation, MERALCO, pass-on charges, Philippine news updates, Rep. Carlos Zarate, Transmission Rate
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