House to probe Meralco increase

Solons urge ERC chair to take leave of absence
/ 02:31 AM December 09, 2013

The House committee on energy will investigate starting Tuesday the rate increase of P4.15 per kilowatt-hour of Manila Electric Co., the utility firm’s highest rate hike that will result in a P830 rise in the monthly bill of households using 200 kWh. INQUIRER FILE PHOTO

The House committee on energy will investigate starting Tuesday the rate increase of P4.15 per kilowatt-hour of Manila Electric Co. (Meralco), the utility firm’s highest rate hike that will result in a P830 rise in the monthly bill of households using 200 kWh.

Households using 300 kWh will have an increase in their monthly bill of P1,245 while those consuming 400 kWh will be charged P1,660 more.


The increases have drawn the ire of consumer advocates who describe it as “insensitive” and “callous” amid the destruction wrought by Supertyphoon “Yolanda,” the huge profits of Meralco, and rising prices of cooking gas and petroleum products.

Meralco said its generation charge would go up P3.44 per kWh because it would be buying more expensive power from producers due to scheduled and forced power plant outages, and the shutdown of the Malampaya gas field for maintenance from Nov. 11 to Dec. 10.


Malampaya supplies natural gas, a fuel cheaper than diesel or liquid condensate, to the Sta. Rita, San Lorenzo and Ilijan power plants.

Add the value-added tax (VAT) and other fees, and the generation charge goes up to P4.15, a huge amount that has further made Meralco rates among the highest in Asia.

Oriental Mindoro Rep. Reynaldo Umali, chair of the committee on energy, said he would summon officials of the Department of Energy, Energy Regulatory Commission (ERC) and Meralco to the hearing.

“This is an issue of public importance especially since every centavo increase in power rates would cost the economy P500 million annually. Imagine the cost of a 415-centavo hike to our economy,” Umali said.

He said that while Meralco’s franchise area covered Metro Manila, Bulacan, Rizal and Cavite, and parts of Laguna, Quezon, Batangas and Pampanga, its 5.2 million customers accounted for 70 percent of the 72 billion kWh used annually in the country.

On Friday, Bayan Muna Rep. Carlos Isagani Zarate filed House Resolution No. 588 calling for an investigation of Meralco’s rate increase.

“This is a positive development and we commend Congressman Umali for acting swiftly on a very pressing issue affecting millions of our countrymen. We hope that Meralco would defer the power rate increase as the probe is ongoing because as history would tell us, it is very difficult for them to refund consumers when they overcharge power rates,” Zarate said in a statement.



Meralco on Friday said that it would implement the increase in the generation charge, which goes directly to its power suppliers, in stages starting this month. The full impact of the rate hike would not be felt this Christmas season.

The firm’s spokesman, Joe Zaldarriaga, said Meralco had asked the ERC that it be allowed to defer the full implementation of the increase in the generation charge, a component of the bill that is adjusted monthly.

Staggered increase

The utility firm and ERC are scheduled to meet Monday to discuss its proposal to implement a staggered increase.

Without the increase, Meralco customers are charged P5.67 per kWH for the generation rate. With it, they will have to shell out P9.11 per kWh, or a 61 percent jump.

Although the generation charge does not go to Meralco, the utility firm has been posting high profits over the past few years.

The publicly listed company, the country’s biggest power retailer, earned P16.30 billion (in core net income) in 2012, up 133 percent from the P7 billion in 2009.

Go on leave

Umali and other lawmakers said ERC chair Zenaida Ducut should take a leave of absence after being charged by the National Bureau of Investigation as one of the main agents of detained businesswoman Janet Lim-Napoles in channeling pork barrel funds to dubious foundations.

Umali said that if Customs Commissioner and former Muntinlupa Rep. Rozanno Rufino resigned after being included in the recent malversation case filed by the NBI, “Ducut should do no less.”

Speaker Feliciano Belmonte said Ducut’s exit from the regulatory body should enable President Aquino to appoint an ERC chair who is more sensitive to the interests of consumers.

“She can’t be suspended just yet because the charges are still subject to preliminary investigation. But I believe that she should take a leave of absence now since the charges are already out there,” Belmonte said.

Zarate said Ducut should be replaced because she could use her position to influence the outcome of the malversation complaint filed in Office of the Ombudsman last week.

“The problem with the ERC is that it has become a stamp pad for big power firms,” he said.

Aroyo appointee

Cavite Rep. Elpidio Barzaga said Ducut was better off addressing the charges of brokering the kickbacks for former lawmakers while giving the President the opportunity to effect changes in the ERC.

“It’s time to reform the ERC and Ducut’s replacement could be the catalyst for change,” Barzaga said.

Ducut was named to the ERC by then President Gloria Macapagal-Arroyo, who succeeded her as representative of Pampanga’s second district in 2010.

Napoles conduit

The ERC chair was charged as conduit of Napoles in getting a total of P34.52 million in kickbacks from the pork barrel of Biazon (P1.95 million), former Ilocos Sur Rep. Salacnib Baterina (P7.5 million), former Davao del Sur Rep. Marc Douglas Cagas IV (P5.54 million), Davao del Sur Rep. Douglas Cagas (P9.3 million), former Davao del Norte Rep. Arrel Olano (P3.175 million) and former South Cotabato Rep. Arthur Pingoy Jr. (P7.055 million).

Biazon filed his irrevocable resignation from the Bureau of Customs shortly after the NBI filed the case against him in the Office of the Ombudsman.—With Inquirer Research



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TAGS: Congress, Consumer issues, Electricity, electricity rate increael, Energy, Probe
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