19 April 2016


A latest case of MERALCO abuse, regulatory capture and collusion, and monumental failure of Electric Power Reform Act (EPIRA)”, the Freedom from Debt Coalition (FDC) assailed the latest round of power rate increase by MERALCO.

FDC led a protest action by a group of electricity consumers in front of the Energy Regulatory Commission (ERC) office today to denounce the looming power rate hike by the energy monopoly starting this month.

The power rate hike is a result of an 8-centavo increase in Feed-in-Tariff (FIT) effective April and the increase in “ancillary costs” nationwide with the Power Assets and Liabilities Management Corporation (PSALM) recovering a "differential ancillary service charge" of P6.5B for Luzon, P1.9B for Visayas and P1.6B for Mindanao which it will start recovering in May.

“The Feed-in-Tariff (FIT) is the government’s incentive to power investors to entice them to invest in renewable energy and guarantee a return of their investments. This is a burden passed on to the consumers,” the FDC clarified.

The FDC challenged the government to account for the billions in Malampaya funds that could have been used to explore new sources of energy.

“Government is raking in billions from electricity as it is already heavily taxed—amounting to almost 10% of total bill. If part of that tax is applied to cover the difference between the grid rate and the FIT then the ordinary consumers will not be unduly burdened. If government will not pay the difference, then it should drop the ridiculous and outrageous taxes on subsidies and system loss, to free up that amount and spare the consumers from additional sufferings, Romeo Junia, one of the spokespersons for the FDC-led Power to the People coalition argued.

“The unjustified rate increases once again point to the inability of the Energy Regulatory Commission (ERC) to perform even its most basic regulatory functions under the flawed Electric Power Industry Reform Act (EPIRA),” Walden Bello, FDC former President and currently a senatorial candidate deplored.

“The virtual capture of regulation by corporate interests is one of the monumental failures of the EPIRA. It is the EPIRA which handed the power sector to private business. Until we repeal it, we will always be at the mercy of the private utilities,” Prof. Ed Tadem, FDC President asserted.

The FDC asked PSALM to explain the justification for the collection of ancillary service charges when it is not providing these services.

“To begin with, why is PSALM collecting these costs for ancillary services from us? Who is responsible for ancillary services? Ancillary services are "support services necessary to sustain the transmission capacity and energy that are essential to maintaining power quality, reliability and security of the grid," Junia explained.

The FDC also questioned the basis for charging consumers so-called ancillary services when they have been on the receiving end of poor services, frequent power shortages and blackouts, from ill-maintained, dilapidated power plants run by dirty energy.

“Among the most obvious functions of a regulatory body is checking the validity of claims being made by the industry it is regulating. For example, the third regulatory period ended on June 30, 2015 but none of those estimates and forecasts which formed the basis for ERC’s approval of the Maximum Average Price or MAP have been evaluated, assessed or validated because the ERC has scuttled the rate reset process by not issuing the "applicable rules" as Meralco calls them!” Junia lamented.

"We denounce the Aquino regime for allowing power monopoly greed and abuses to continuously plague the Filipino people and hold their “Daang Matuwid” politicians and electoral officials accountable for their silence and acquiescence in the face of the electric consumers’ immense sufferings, the FDC asserted.

On February 19, FDC launched its 5-point Electoral Agenda which include the repeal of the Electricity and Power Industry Reform Act (EPIRA) and securing power for the people. Walden Bello, FDC’s officially supported senatorial candidate endorsed FDC’s electoral agenda together with other party-list groups like Sanlakas, Ating Guro, Partido Laban ng Masa (PLM) and Ang Nars.

The FDC challenges other political parties and candidates to join the electricity consumers’ protests and support its demands to: 1.) stop the impending power rate increase; 2.) investigate the ERC for its failure to curb corporate abuses and failure to regulate; 3.) revoke MERALCO's franchise for its string of corporate abuses and other culpable and gross violations of its franchise; and, 4.) repeal the Electric Power Industry Reform Act (EPIRA).

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