Freedom from Debt Coalition ( FDC ) calls on all the long-suffering MERALCO  consumers to express outrage at the impending P4.25 kwh power rate hike this December by writing or stamping the word“ GANID “ on MERALCO  bills.  FDC member organizations and leaders will launch the TatakKontra-Ganid campaign today, December 9, 2013before the office of the Energy Regulatory Commission ( ERC ) which will meet en banc to discuss the MERALCO rate hike.


FDC, three days ago , December 5,  lambasted the new MERALCO rate hike as the latest in a long series of acts of corporate greed that this power distribution monopoly has manifested at the expense of its consumers in Luzon where it controls more than 70 percent of the market.  Coming at a time when the entire nation reels in the devastating impact of the supertyphoon Yolanda andwhen  Christmas is just around the corner,  this cruel act will only sharpen the pangs of poverty and inequality in our country.

FDC denounces MERALCO for making the false justification that the power rate hike is unavoidable due to the Malampaya maintenance shutdown from Nov 11 to December 10.  FDC also denounces Malacanang for parroting the same false excuse as it ran to the rescue of MERALCO whose rate hike it called “ reasonable”.

The Malampaya shutdown is not an accident. It is a regular biannual maintenance operation which  is scheduled way ahead of time and whose costs should be built into MERALCO’s  Power Supply Agreements (PSA) with its suppliers, particularly, First Gas ( Santa Rita ), Therma Mobile ( San Lorenzo ) and KepcoIlijan and should therefore be built into the power rate.  If MERALCO did not impute this into the cost and then the rate,  it then has contracted imprudently and therefore,  its owners and investors must bear the cost of such imprudence.

MERALCO claims further that the Malampaya shutdown will drive the prices upward at the Wholesale Electricity Supply Market ( WESM ) from where MERALCO will buy to fill in its shortage.But before we go to WESM,  where is the assumed excess capacity of these power plants with which MERALCO has power supply contracts.  Or is it WESM now which holds all the un-contracted supply of the power plants?  The Department of Energy  ( DOE ) through the National Grid Corporation of the Philippines ( NGCP ) is in a legitimate position to look into this excess capacity of the power plants that is outside the WESM trading.  It is the mandate of DOE to ensure the stable supply of electricity.

For WESM to make sense, there must be a stable supply of electricity and many competing players to make competition work to drive prices down.  But with a few players each with a strong market command and with an unstable and inadequate power supply,  power is sold high at WESM.  This is why WESM  has failed to bring the price of electricity down in Luzon and the Visayas and will surely be a failure in Mindanao where both DOE and ERC are going full steam on the operation of the Interim Mindanao Electricity Market ( IMEM ).  

Again,  we  reject  MERALCO’s explanation that the  generation charge is a pass-through cost and that it has nothing to do with it. Audits done by the Commission on Audit (COA) in 2004 and 2007 showed that MERALCO could have overcharged its generation charges, like P 2.7 billion in 2007 alone.  With this record, ERC should have intervened to validate current claims by MERALCO of its anticipated generation charges. 

We reiterate what we earlier said :“MERALCO’s passing on more burdens on the consumers, even in times of disasters like the present, is the bitter fruit of the privatization of the electric industry under the Electric Power Industry Reform Act (EPIRA).  EPIRA has shown time and again that private corporations, especially monopolies like MERALCO, should not be entrusted with controlling areas of the economy invested with public interest like electric power, lest the people will suffer.”

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