Meralco, refund full amount of P6.9 billion to consumers in June -- scientist group


May 16, 2017


We in AGHAM – Advocates of Science and Technology for the People urge the Energy Regulatory Commission (ERC) to compel Meralco to refund the full amount of P6.9 billion pesos incurred from the consumers from January 2014 to December 2016. The refund must be given this June to provide immediate relief to the consumers and to stop the company from using the people’s money for its profit.

We decry the overcharge done by Meralco to its consumers in the past three years. Meralco’s over-estimation has cost its consumers as much as P6.927 billion, according to its own computations. Such overcharges contribute to its core net income which has been steadily increasing from 2014 with P18.1 billion, P18.9 billion in 2015, and P19.2 billion in 2016. We also condemn the electric company’s attempt to reduce the total amount to be refunded by P1.08 billion by including real property tax payments as pass through charges.

The three-month long duration of the refund at a rate of P0.7541 per kWh every month for three months starting in June is nothing but a delaying tactic which enables Meralco to use the consumers’ money for its own benefit. We compel ERC to refund the full amount at the soonest possible time to prevent Meralco from gaining even more profit from the consumers’ money. ERC should also make public the computation used by Meralco to calculate the refund.

Meralco’s actions also violates Republic Act 9209, an act pertaining to Meralco’s franchise, one of the provisions of which states that the grantee (MERALCO) shall have the obligation to provide open and nondiscriminatory access to its distribution system and services for any end-user within its franchise area consistent with the Electric Power Industry Reform Act of 2001 or EPIRA. It also asserted that the grantee shall not engage in any activity that will constitute an abuse of market power such as but not limited to, unfair trade practices, monopolistic schemes and any other activities that will hinder competitiveness or businesses and industries.

We urge ERC to review Resolutions No. 16 series of 2009 and No. 23 series of 2010, which require distribution utilities to file for over- or under- recoveries of pass through charges after a three-year period. We question the basis of the three-year feedback mechanism as this duration can be used by electric companies to use the overcharges to gain additional profit. In the immediate, the three-year feedback mechanism should be reduced especially since distribution utilities such as Meralco have capacity and resources to compute over- or under-recoveries as often as annually.

We denounce the pass-through rates scheme used by Meralco and other distribution utilities as allowed in EPIRA. This scheme has allowed big electric companies such as Meralco to dramatically overcharge its consumers and use the money to gain even more profit. After almost 16 years, EPIRA has proven to be an anti-consumer and pro-corporate law that puts the control of the entire energy industry into the hands of private entities. As the 17th anniversary of EPIRA nears, we call to Junk EPIRA and craft a new policy that will pave the way for a nationalized energy industry.

For reference:

Finesa Cosico
Secretary-general, AGHAM
(02) 998 4226 / 0921 312 2416