PALACE: NO POLITICAL DEAL IN POWER HIKE. Malacanang on Tuesday would seek the recall of an order granting Manila Electric Co. (Meralco) a rate increase starting next month as it denied allegations that the increase was part of a deal with the Lopezes to draft Senator Noli de Castro as President Gloria Macapagal-Arroyo's running mate.
"The President will not make any deals, and she will always take into consideration the public interest," her spokesperson Ignacio Bunye said.
A talent of the Lopez-owned ABS-CBN television network, De Castro has consistently topped surveys on possible vice presidential candidates. In exchange for De Castro agreeing to be her running mate, the President would allegedly help the Lopez firms Meralco, Maynilad Water Services, and Benpres Holdings recover from their financial woes through Malacanang’s intervention.
Bunye said the government, through the Department of Energy, would appeal the new rates before the Energy Regulatory Commission (ERC), which approved the Meralco's request for an increase on Thursday. Opposition Senator Aquilino Pimentel Jr. alluded to the deal when he urged the ERC not to allow itself "to be an instrument of political expediency." A top official of the ruling party, Lakas-Christian-Muslim-Democrat (Lakas-CMD), who asked not to be identified, said the 12-centavo-per-kilowatt-hour increase that the ERC granted Meralco was a sign that De Castro "is now in the bag."
But at his briefing, Bunye said the final decision on power rate increases rested with the ERC. Pimentel said the ERC showed "insensitivity to the needs of the people" in granting the rate increase sought by Meralco. The additional 12 centavos per kilowatt-hour that some four million customers will pay Meralco starting January will allow the country's largest power distributor to earn about two billion pesos more next year. Pimentel said the rate hike was "totally unjustified" because the ERC chairman admitted that the two billion pesos in additional income for Meralco next year would finance the firm's new projects. He said the expansion of any business should not be charged to its customers, but to the owners and shareholders of a company who should put up the capital needed for the expansion. Pimentel believed that the rate increase could have been motivated by Meralco's desire to raise money to allow the company to pay the refund to customers, estimated at 28 billion pesos, ordered by the Supreme Court last year. The high court barred Meralco from passing on to customers its income tax payments since 1994. Meralco president Jesus Francisco, however, said Monday that the increase and the refund were unrelated.
Outside the Senate, protests from militant groups are mounting against the rate increase. The Freedom from Debt Coalition picketed the ERC office Tuesday to denounce the commission's decision to grant Meralco a provisional authority to increase its rates. "This recent move by the Commission enrages us consumers who have long been suffering from high electricity rates. The ERC has once again prioritized the interest of Meralco over the interest of the consumers," FDC vice president Wilson Fortaleza said.
In Lucena City, a newly formed multi-sectoral coalition said it would launch street protests against the impending Meralco rate increase. Marilyn Quirez, a convenor of the alliance, said the increase was unjust. "This is the most painful Christmas gift of the Lopezes and the Macapagal-Arroyo administration to the Filipino people. But the suffering masses will not take this sitting down," she said. The Kalipunan ng Damayang Mahihirap said the power rate increase showed the Macapagal administration's indifference to the plight of the poor.
Pete Ilagan, president of the National Association of Electricity Consumers for Reforms, said: "Consumers should not bear the burden of Meralco's mismanagement. It should be the company's stockholders and management." For its part, the Philippine Consumer Watch lashed out at the government for its "failure" to assert its authority to stop Meralco from passing on to consumers its funding needs for capital investment.
Source: Philippines Daily Inquirer, 3 December 2003
SENATOR WARNS VS POWER RATE HIKE. Sen. Teresa Aquino-Oreta warned consumers yesterday that their already high monthly electricity bills would have to go higher next year.
She aired the warning after the government-owned National Power Corp. (Napocor) announced that its losses would jump by 50 percent to P113 billion in 2004. Whether the losses would be financed through foreign borrowing or government subsidies, it is the consumers who will end up paying for them in the form of an addition to the monthly bill similar to the controversial purchased power adjustment (PPA), she said. She said a huge part of the losses represents multi-billion payments to private investors who constructed power plants during the power crisis in the mid-80s and whom Napocor is forced to pay under contracts that have been found disadvantageous to the government.
Oreta urged President Arroyo to tell the nation why Napocor losses keep piling up when the government and consumers are supposed to benefit from her decision to renegotiate the onerous contracts. Oreta said the President and concerned officials have kept the people in the dark on the renegotiation of these contracts.
She also reminded Mrs. Arroyo about the promise she made more than a year ago, when consumers denounced the high PPA charges, to bring down the cost of electricity. For a while, the monthly electricity bill went down, but soon, it was back to where it was, she said. Oreta said the President would be hounded by this and other failed promises, the biggest of which is her December 2002 public commitment not to run in 2004, when the election campaign begins.
Source: Philippine Star, 10 November 2003
PALACE ASKS BURDENED PUBLIC FOR MORE PATIENCE ON POWER COSTS. Malacanang asked yesterday the public to be more patient with the government's seemingly futile efforts to bring down the cost of electricity in the country.
"Please have a little more patience," Presidential Spokesman Ignacio Bunye said. According to him, President Arroyo is exerting all effort to solve the problem of high power rates. At the moment, Bunye said, Mrs. Arroyo is in the process of negotiating with the Manila Electric Co. (Meralco) for the enforcement of the "economies of scale" program. Bunye said the program aims to lessen the power demand from the National Power Corp. (Napocor) and eventually reduce the cost of power production.
Bunye also belied reports that the Energy Regulatory Commission (ERC) is trying to protect the interests of Meralco at the consumers' expense. He said the ERC is an independent body created under the law and that it would be highly improbable for such an agency to favor the interests of Meralco over those of the consuming public.
After the ERC approved its petition for a rate hike, Meralco increased power rates by 8.76 centavos per kilowatt-hour on June 1 for consumers using 300 kwh or more a month. This would translate into a P17.51 increase in the monthly bills of consumers who use at least 200 kwh, according to the group People Opposed to Warantless Electricity Rates (POWER).
Meralco also began refunding P30.05 billion to small consumers as ordered by the Supreme Court, which ruled the power firm had overcharged consumers.
Source: Philippine Star, 30 June 2003
MERALCO REFUND PLAN GETS OK; CONSUMER GROUPS UNHAPPY. The Energy Regulatory Commission (ERC) approved Monday night a proposal of Manila Electric Co. (Meralco) to refund in June customers using up to 100 kilowatt-hours a month.
The ERC also ordered Meralco to stop collecting 16.7 centavos per kilowatt-hour in excess charge that it had begun collecting in 1994. In a five-page order, the ERC said it approved Meralco's proposal to implement Phase 1 of the refund scheme after having found it "reasonable and in the public interest."
Consumer groups are unhappy with decision, with one group claiming that Meralco's computation of the amounts to be returned to the small customers was inaccurate. The National Association of Electricity Consumers for Reforms (Nasecore) said the amounts that Meralco wanted to return to small customers were inaccurate.
Renato Reyes Jr., spokesman of the People Opposed to Warrantless Electricity Rates (POWER), said that while his group welcomed the ERC decision as a victory for the public, "we continue to demand full, unconditional and immediate refund to all residential customers." Reyes called the proposal for Meralco to refund the rest of its customers over a period of nine years "patently ridiculous and unjust." POWER official Giovanni Tapang estimated the total refund for residential customers at no less than 10.5 billion pesos.
The Freedom from Debt Coalition (FDC) said the ERC did not consider its inputs and those of consumer groups when commission approved the Meralco proposal. The FDC had proposed converting the overcharges into shares of Meralco stock.
Source: Philippines Daily Inquirer, 14 May 2003
MACAPAGAL VOWS TO CUT POWER BILLS, ENFORCE REFUND. Pledges to fully reimburse small power users overcharged by the Manila Electric Co. and to reduce electricity bills starting July topped President Macapagal-Arroyo's gift package to workers in Thursday's celebration of Labor Day.
Addressing moderate labor groups as their militant counterparts staged rallies nationwide, the President declared that the implementation of the Supreme Court's decision ordering Meralco to refund the overcharges, estimated at more than 28 billion pesos, was a matter of "justice." But as the President herself indicated, consumers could not expect immediate relief as the refund would first have to go through a "determination process" by the Energy Regulatory Commission, which the chief executive described as an "independent" body. Ms Macapagal said the Department of Energy (DOE) would take the lead in the executive branch's involvement in the implementation of the Meralco refund.
On Wednesday, the Supreme Court threw out Meralco's second motion for reconsideration of its November ruling ordering the utility firm to reimburse its consumers the excess charges it collected starting 1994. The President said that the DOE would petition the ERC to order the full reimbursement of small electricity users and provide for deductions in the future monthly bills of moderate power users.
The state-owned National Power Corp., which is up for privatization, will "downscale" its operations to allow independent power producers (IPPs) to achieve "economies of scale" so that power costs will go down.
Source: Philippines Daily Inquirer, 2 May 2003
MERALCO SAYS IT WILL COMPLY WITH SC’S REFUND ORDER. The Manila Electric Co. (Meralco) said yesterday it would comply with a court order to refund customers billions of pesos but added repayments would have to be carefully planned to allow the firm to remain viable.
The Supreme Court on Wednesday threw out Meralco’s appeal to reconsider an earlier ruling that it had to refund customers who were overcharged for four years from 1994. Consumer groups had placed the amount of the refunds as high as P29 billion. "Well, we have to comply with the order of the Supreme Court," said Meralco president Jesus Francisco but added the refund would hurt Meralco’s bottom line as well as force the cancellation of investment to improve services.
Meralco officials are set to meet with creditors and shareholders to come up with a financial plan that would enable the refunds to be made while ensuring the company remains operationally viable. The ERC will also likely ask Meralco to charge whatever rate increase it would be granted on big power consumers on a "socialized pricing policy."
Source: Philippine Star, 2 May 2003
NO WAY OUT FOR MERALCO: SC SAYS RULING FINAL. Manila Electric Co. (Meralco) has no other option but to immediately repay the excess charges it imposed on its consumers, despite filing a motion last week asking the Supreme Court to rule on its third decision compelling the utility firm to return the excess collections.
Thus said Supreme Court spokesperson Ismael Khan, who declared Tuesday that the high court ruling on the refund, estimated to be at least 28 billion pesos, was final and executory. Meralco filed its latest motion after the third division "denied with finality" on April 9 the company's motion for reconsideration, which sought to reverse the Nov. 15, 2002 order that Meralco refund customers the amount it had overcharged for four years from 1994.
The excessive charges stemmed from the decision of the firm to treat income taxes and other assets not related to the business as its operating expenses. Khan told reporters that the high court, particularly the full court, would not give "due course" to Meralco's latest motion.
President Gloria Macapagal-Arroyo said Meralco must comply with the court order but hinted her administration may be open to a settlement. Ms Macapagal said Meralco, which has warned of possible bankruptcy, "must find a way to meet its obligations to the public in line with the judicious use of its own means and resources." However, the government, a minority shareholder, will support any legal means to resolve this issue that is acceptable to the court and the consumers," the President said in a statement. Meralco president Jesus Francisco said he had no problem with the statement of Ms Macapagal. "Everybody knows that the Supreme Court order must be implemented."
Meralco officials had said the motion was a last resort for the firm. Calling Meralco a "bully in the playground," the Freedom from Debt Coalition blasted the Lopezes, owners of Meralco, for their continued defiance of the Supreme Court ruling. The FDC said the firm was holding the consumers hostage, particularly those who have signified their intent to be owners of Meralco through a stock option.
Energy Secretary Vincent Perez Jr. said he would gather within the week representatives from Meralco, consumer groups and the Energy Regulatory Commission to start talks on how to implement the multibillion-peso refund ordered by the Supreme Court.
Source: Philippines Daily Inquirer, 23 April 2003
SUPREME COURT HAILED FOR MERALCO DECISION. Consumer groups and opposition congressmen on Thursday greeted the Supreme Court's final ruling on the Meralco refund case with relief.
"We welcome the decision, and all consumers will welcome it for sure," said Ana Marie Nemenzo, president of the Freedom from Debt Coalition. "It's good that it's all over," Maguindanao Rep. Didagen Dilangalen said, as he underscored the need for the Manila Electric Co. to immediately pay its customers. Bayan Muna party-list Rep. Satur Ocampo warned Meralco against using the SC decision "as an excuse for (seeking an) additional increase" in electricity rates. Meralco, the country's largest power firm, should present a "clear and systematic way" for reimbursing its customers, Ocampo said.
While they were one in welcoming the decision, however, consumer advocates and opposition lawmakers had different ideas about how to implement the refund. The National Association of Electricity Consumers for Reforms urged Malacanang to form a "Power Commission" to manage the refund, which it estimated at 28 billion pesos. Nasecore president Pete Ilagan said the commission should be composed of consumer and civil society groups actively monitoring the sector's issues should be appointed to manage the funds.
The FDC once again pushed for the conversion of the refund into shares of stock in Meralco. Nemenzo said ordinary consumers on the average would only get a refund of 33 pesos per month over a period of eight years, based on earlier published reports. "These shares will then be used to acquire seats in the Meralco board, thus increasing and strengthening consumers' leverage to pressure for changes in the management and operations of the distribution utility," the FDC said in a statement.
Another group, Power or People Opposed to Warrantless Electricity Rates, sought an immediate cash refund. Power estimated that residential customers who consume up to 50 kilowatt-hours a month would get a refund of 901 pesos for the nine years that Meralco collected the excess charges. Those who use up to 100 kWh would get 1,803 pesos. Consumers with a 200-kWh monthly bill would get 3,606 pesos and those with 300 kWh would get 5,410 pesos. However, Power spokesperson Renato Reyes said the actual amount to be refunded had exceeded the high court's estimate of 28 billion pesos.
House Minority Leader Carlos Padilla said that the "big question" was how the decision would be implemented. Majority Leader Neptali Gonzales II sounded a cautionary note, saying the high court ruling "might be cause for jubilation for customers, but it might even cause bankruptcy" for Meralco.
Source: Philippines Daily Inquirer, 11 April 2003