- Get Involved
Consolidating Consensus, Advancing People’s Struggles and Building Alternatives
The announcement made by Rep. Reynaldo Umali, chair of the House Committee on Energy, abruptly ending the House hearings on the review of Electric Power Industry Reform Act (EPIRA) completely eliminated all possibility of amending, much less repealing this law by the current Congress despite strong public clamor.
Citing the strong opposition from national big business groups such as the Management Association of the Philippines ( MAP) , Employers’ Confederation of the Philippines (ECOP), inancial Executives Institute of the Philippines ( FEIP), and foreign chambers of commerce like the American Chamber of Commerce , European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, and the Korean Chamber of Commerce of the Philippines to amending EPIRA, Umali was blatant enough to tell the public that the Aquino-LP majority in the committee considered the interests of the power oligarchs and the foreign corporate chambers much more important than the interests of the consuming public and the small and medium businesses.
The Freedom from Debt Coalition (FDC) warns that another case of corporate abuse and impunity by MERALCO is about to be committed at the expense of the long-suffering electricity consumers with the power company’s recent application with the Energy Regulatory Commission (ERC) of the so-called “interim rates” in order to remedy the company’s failure to reset its power rates and charges, as required by the ERC rules, every four years.
FDC asserts that the interim rates applied for by MERALCO in ERC Case No. 2015-112RC and its capital expense program proposed in ERC Case No. 2015-016RC are illegal, highly irregular, alarming and anomalous.
MERALCO’s interim rate application effectively undercuts and sidesteps the need and process for the Rate Reset—an adversarial process that theoretically requires the ERC to review and approve, every four years, MERALCO’s Distribution, Supply and Metering (DSM) charge, under ERC’s own rules for Performance Based Regulation (PBR).
The MERALCO Franchise: RA 9209
MERALCO is the largest distribution utility in the country.
According to the flyleaf profile in its 2013 Annual Report, MERALCO powers 5.3 Million customers, is home to approximately 25% of the entire Philippine population, accounts for 75% of the Luzon electricity market – 55% nationwide – supplies the power needs for 50% of GDP, 60 % of total manufacturing output.
MERALCO’s sales revenue for 2013 was P298B. Market capitalization was P282B. But we hasten to add that “Equity…” was only P75.1B.
In exchange for this huge chunk of the market, the franchise requires that MERALCO must meet minimum performance standards, such as: the operation and maintenance, in a superior manner, of an open and non-discriminatory electricity distribution system; the supply of electricity in a least cost manner; the preservation of the franchise; the promotion of consumer interest.