ILOILO CITY, Philippines – The Iloilo Chapter of the Freedom from Debt Coalition has once again called the attention of the Energy Regulatory Commission (ERC) to enforce its order issued June 9, 2006 directing Panay Electric Company (PECO) to return its overcharges to electricity consumers in Iloilo City.

The call was made in time for the hearing being conducted by the ERC on the issue today (6 May 2009) in its national office in Manila.

The parties of interest, including Panay Power Corporation, an independent power producer supplying electricity to PECO, was directed by the ERC to appear in the scheduled hearing in order to tackle unresolved issues which prevented the implementation of the said refund order.

The nationwide campaigns and advocacy organization is represented by lawyer Romeo P. Gerochi who also stands as the chairperson of FDC-Iloilo.  

The said overcharges cover a period of 114 months or from February 1998 to July 2005 reaching a staggering P2.89 billion.

However, the power firm was able to effectively delay the implementation of the order by resorting to legal tactics of consistently filing deferment of implementation before the Commission, which the latter also approved.

In its ten-page order, the Commission found out that the power firm incurred over-recoveries by using an inconsistent computation from what is approved in its Power Purchase Agreement which was granted by the then Energy Regulatory Board.  

The order also revealed that PECO converted its pilferage recoveries into kilowatt-hour sales and deducted the same from the kWh purchased and generated for the previous month instead of deducting the said recoveries from the power cost.

The regulatory body also stated in its order that its “grossed-up factor mechanism” already allows the distribution utilities to recover the actual costs of purchased power for it provides what it calls as true-up mechanism.

“Simply put, the ERC decision only disclosed that PECO resorted to over-charging its consumers by playing with the formula and computations in order to raise profits beyond what is allowable under the law,” said Ted Aldwin Ong, secretary-general of FDC-Iloilo.  

Ong added that “the ERC have been aware of this malpractice as such we encourage the Commission to listen to the call of the thousands of electricity consumers who have been victimized by PECO’s greed and abuse and direct PECO to implement the order right away.”

The electricity consumers in Iloilo City hailed the efforts of the group after the refund order was issued by the Commission 3-years ago. Majority of the consumers who have been fed up by PECO’s historical abuses expressed opposition on the proposed staggered cash refund. It instead pushed for the democratization of the power firm’s ownership by converting the refundable amount into equity shares of consumers, a move which PECO’s owners vehemently opposed.

FDC’s lawyer Romeo P. Gerochi also appealed to the ERC “that it favors the consumers by ordering PECO to implement its earlier directives in order to alleviate the lives of the poor consumers in these times of economic recession.”  

“The amount of money for refund is not PECO’s earnings but an amount which was illegally collected from the consumers. Hence, it must be returned at once. In fact, its owners must be penalized for institutionalizing an immoral practice of collecting an amount which is not part of the services rendered by the public utility,” stressed by Gerochi.

The group reiterated its demand that PECO’s ownership be democratized by way of converting the refundable amount into equity shares. The ERC order opens an opportunity for the Ilonggos to institute change. Reversing the privatized set-up of the local power industry into a participatory and consumer-led industry is a vital first step for reforms, concluded by FDC. -30-

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