ERC hearings on Meralco rate hike to resume Jan 5

The Energy Regulatory Commission (ERC) will resume on Jan. 5, 2004 public hearings on the provisional authority (PA) granted to the Manila Electric Co. (Meralco) for a 12-centavo power rate increase.

This was the decision of the ERC after Meralco asked for an extension of time to come up with pertinent documents to support its rate petition.

During the supposed first public hearing, various consumer groups asked the commission to issue a provisional suspension to prevent Meralco from imposing the rate increase by Jan. 4 next year.

ERC chairman Manuel Sanchez, however, said the commission can not issue another order to "immediately" suspend the PA issued last Nov. 27 to Meralco as "we will need time to study this before coming up with another decision."

"We cannot decide instantly. We have to carefully look into the merits of the consumer group’s claims," Sanchez said.

Present during the hearing were: oppositors led by Bayan Muna, Freedom from Debt Coalition (FDC), consumerist Genaro Lualhati, among others.

FDC, in a statement, said the PA granted to Meralco is bereft of merit because the power firm failed to substantiate its claim. "Since Meralco failed to produce these documents, what is the ERC’s basis for granting the PA? How did the ERC come up with the decision in the first place?," FDC vice president Wilson Fortaleza said.

Another group, the Federation of Textile Industries (FTI), appealed to the ERC to reconsider the PA since this will mean higher electricity that will make our textile industries less competitive among its Asian counterparts.

FTI representative Ernie Tangco said major textile firms have closed down because of high costs particularly the electricity expenses. "This will mean loss of more jobs,"Tangco said.

Consumer Oil Price Watch chairman Raul T. Concepcion, on the other hand, said "people should accept that the PA is already there".

"What we need to rationalize is whether the amount is correct more or less. We have no choice but to accept it but we have to ask Meralco for data to support its claim. The assets where they based their return-on-rate-base (RORB)," he said.

Meralco vice president and utility economics head Ivanna dela Pena, defended their rate petition saying the power utility firm had been allowed to adjust its rates by only 10.4 centavos in the past nine and half years or less then 1.2 centavos yearly.

During the same period, dela Peña said Meralco invested almost P60 billion in its electric distribution system.

"Since 1994, increases in the prices of such goods and services as LPG, bus fares, or newspapers, have been much higher compared to the portion of the monthly electric bill that goes to Meralco," she said.

Dela Peña said the ERC, in its provisional approval, took note of Meralco’s financial difficulties and said it is aware of the fact that Meralco’s present condition has resulted to the deferral of much needed capital expenditures.

"They also took particular notice of the deterioration of the power service provider’s credit standing, as reflected in reports of an independent international credit rating agency, Standard and Poor’s rating services," dela Peña said.

Meralco filed with the ERC last Oct. 10 a petition to adjust its rates by an average of 13.6 centavos per kilowatthour, to update its tariffs to more recent cost levels. Citing the utility’s urgent need for rate relief, the ERC last Nov. 27 allowed Meralco to provisionally adjust its rates by 12 centavos per kWh starting January 2004.