ERB to Meralco: Consolidate rate hike petitions

The Energy Regulatory Commission (ERC) has directed the Manila Electric Co. (Meralco) to consolidate its two petitions for rate increases in an order issued June 18, 2002.

The ERC said this move would enable the commission to simplify and expedite the resolution of the application for approval of the rates.

Meralco has two existing rate increase petitions pending with the ERC. The first one was filed in April 2000 for a 30-centavo per kilowatthour (kWh) basic rate hike. The other one is a petition for an unbundled rate of P1.12 per kWh filed in December 2001.

The ERC said the hearing of these consolidated cases has been scheduled for June 25 at 2 p.m. in the ERC courts.

In that same order, the ERC has dismissed the "motion for reconsideration" filed by Meralco to strike out from the record the testimony of applicant’s witness Ms. Filipina Tuazon, vice president of the Asian Appraisal Co. Inc. (AACI).

It would be recalled that the ERC questioned the appraisal made by AACI during one of the hearings for the unbundled rate petition of the power firm.

"Since the standards for appraisal of assets set by the law and its implementing rules cannot be disregarded, the commission was called upon as it did to purge the records and the proceedings of testimonies and documents which have no legal value nor justifiable purpose soonest as the imperative to do so become apparent," it said.

The order also said that "the commission notes the relevance of a prior petition by applicant Meralco involving the same subject matter, ERC Case No. 2001-646, and that among the documents submitted in its support are the reports of the same AACI on Meralco’s depreciable assets dated Jan. 25, 2000 and Meralco’s lands dated Feb. 11, 1992. The documents were verified through the sworn statement of Jaime Dumlao and the testimony of Max Montes both officers of AACI senior to Filipina Tuazon."

ERC decided to strike out the testimony of ACCI from the unbundling rate petition of Meralco since the "appraisal report is the product of special project to train applicant Meralco’s staff in valuation methodology."

The commission also noted that "the AACI’s participation or scope of work was limited to, among others, conducting seminars/workshops to designated employees of applicant on how to undertake the office revision appraisal; reviewing the refinements and deletions as of Dec. 31, 1999; providing the appropriate developed trend factors and price indices to be used in the computation of the cost reproduction, supervising the actual computation of depreciation; and random checking of computed Sound Value figures provided applicant.

The motion for reconsideration of Meralco seeks the reversal of the open court ruling of the ERC last April 17, 2002 to strike out from the records the testimony of Filipina Tuazon of AACI on the revaluation of applicant’s fixed assets for being hearsay and incompetent under the requirement of Section 43 of Republic Act 9136 and as amplified by the implementing rules, in determining the applicable rate base, the valuation of assets be made by an independent appraisal company (Section 5, Rule 15 of the implementing rules and regulations of Rep. 9136.

Meanwhile, Meralco officials said they are still coordinating with the ERC before the scheduled hearing on what really the commission wants the company to do. "We need to clarify what the order means," the officials said.