Meralco power rate hike, another cross to bear by consumers

Posted:

April 11, 2017

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Scientist activist group AGHAM – Advocates of Science and Technology for the People together with Bayan Muna and People Opposed to Warrantless Electricity Rates (POWER) stormed the Meralco office at Kamuning-EDSA today to protest the unjust increase in Meralco’s power rate. The increase is supposedly due to the Malampaya natural gas plant shutdown.

The groups decried the collusion between Meralco and power generation companies to manipulate market prices of electricity. The group also hit the ineptitude of the Energy Regulatory Commission (ERC) to protect public interest.

“The power rate hike, already reflected in the bill for March and will continually increase until May, is another cross to bear by Meralco’s consumers, especially as it comes at a time when we can expect higher electricity usage during the summer months,” said Finesa Cosico, secretary-general of AGHAM and co-convener of POWER.

AGHAM exposed the connection between the power generation companies affected by the Malampaya shutdown and Meralco. Two of the power plants directly supplied by Malampaya, Sta. Rita and San Lorenzo, are operated by First Gen Holding Corporation which is owned by the Lopez family. Manuel Lopez served as the former chairperson of Meralco until it was taken over by Manuel V. Pangilinan. Until now, Lopez is still a member of Meralco’s board of directors and has minority shares in the company.

The group also stated that one of the provisions in Meralco’s contracts with power suppliers is the declaration of the Malampaya shutdown as a ‘force majeure’ occurrence where additional costs will be carried over to the consumers as automatic pass through charges.

“Contrary to Meralco’s claim that the Malampaya shutdown is a ‘force majeure’, the shutdown is indeed scheduled, thus the company had ample time to manage the possible effects of the shutdown to prevent circumstances that could lead to a power rate hike. We suspect there is connivance between Meralco and power generation companies to manipulate market conditions to justify a power rate hike,” said Cosico.

In its petition to ERC to stop the power rate hike, POWER raised the inability of Meralco to provide adequate proof of increased fuel costs as the latter only provided mere estimates and projections in its computation. POWER also accused Meralco of overpricing as the computation used in their request for provisional authority submitted to ERC considered the generation cost for the whole month of February when the Malampaya shutdown lasted for only 20 days.

The group slammed ERC for failing to protect public interest when it did not conduct public hearings to give consumers the opportunity to challenge Meralco’s application, citing it as grossly unfair to the consumers as an increase in electricity is bound to have indirect effects to the cost of goods and services. They also denounced the Electric Power Industry Reform Act (EPIRA) which allows unwarranted additional costs to be passed on to consumers.

“Both Meralco’s capability to manipulate the power rate and ERC’s ineffectiveness in stabilizing it can be rooted in the country’s deregulated energy industry under EPIRA. By permitting private corporations to control the entire process of power production from generation to distribution, we will remain enslaved by their profit-driven motive and the inutility of regulatory agencies such as ERC. The public interests would always be secondary in making electricity as a public utility if we continue to privatize and liberalize the power industry,” said Cosico.

“We should not let the private corporations succeed in their attempt to manipulate electricity prices. We demand the ERC to immediately order Meralco to stop charging the increased rate to its consumers. EPIRA has been a big failure in providing competitive electricity pricing rather, the power industry has become a monopoly control industry of big corporations. We must scrap EPIRA and draft an energy law that serves the needs of the consumers and the country,” ended Cosico.

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​For reference:
Feny Cosico, Secretary general
AGHAM ​Advocates of Science and Technology for the People
(02) 282 4129