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PRESS RELEASE (May 25, 2009)

NASECORE ASKS ERC TO ORDER MERALCO TO REFUND THE P49.5 BILLION IT ‘overcharged’ ITS CONSUMERS

A consumer group yesterday asked the Energy Regulatory Commission (ERC) to order Manila Electric Company (Meralco) to immediately refund to its customers the amount of P49.563 billon which Meralco  allegedly “overcharged” its customers from June 2003 to June 2006.

In a petition, the National Association of Electricity Consumers (Nasecore) for Reforms (NASECORE) said the amount represented the difference between the Meralco’s monthly generation charge and the generation rate of the National Power Corporation which was approved by ERC as the “benchmark” for Meralco’s electricity rates.

Nasecore president Pete Ilagan charged that Meralco violated the Electric Power Industry Reform Act of 2001 (EPIRA) and the Franchise Law (Republic Act No. 9209) in setting the electricity rates which were higher than the generation rates of NPC from June 2003 to June 2006.

Included in the amount is the legal interest of 12% per annum on the overcharged rates.

In its 32-page complaint lodged before the government regulators, the Nasecore accused Meralco of charging its captive market in the supply of the electricity “not in the least cost manner” as required by law.

The Nasecore noted that according to previous decisions of the Energy Regulation Board (ERB), the power rates approved for Meralco’s individual IPP’s (Independent Power Producers) should all be lower than the NPC rates.

“The three decisions of the ERC in approving the applications of the power purchase agreement with Meralco’s IPPs have recognized, acknowledged, used, and treated with finality the NPC rate as the benchmark in approving the individual rates of Meralco IPPs ,” Nasecore said.

Citing Section 4 of Republic Act 9209 (Meralco Franchise) and provisions of Epira law, Nasecore said Meralco was duty bound to supply electricity to its captive market in the least cost manner, reduced electricity costs and to avoid abuse of market power such as  unfair trade practices and monopolistic schemes.

“However, these objectives of Republic Act No. 9136 (EPIRA) and RA 9209 were blatantly disregarded when Meralco started to charge from June 2003 to June 2006 its captive market higher electricity costs than that mandated by law,” the consumer group lamented.

Nasecore lamented that despite the passage of the two laws, Meralco has failed to comply with its responsibilities to the public of supplying electricity at the least cost manner.  

“Six years have passed, the objective of the Epia law are far from being realized, despite the provisions meant to protect the consumers from unfair, unjust, and unreasonable electricity rate,” Nasecore said.

No wonder, Nasecore said, Meralco’s electricity rates are considered the highest in Asia.

Nasecore also asked the ERC to order Meralco to refrain from committing acts tantamount to abuse of market power and pay the maximum penalty of P50 million each month from June 2003 to June 2006 for the violation of EPIRA law.

Nasecore was joined in its complaint by a number of individuals feeling the pinch of Meralco’s prohibitive power rates.

Reference:
PETE L. ILAGAN
M-09178461299