16 June 2004
The Freedom from Debt Coalition welcomes the Supreme Court’s ruling to permanently disallow the P0.12/kWh provisional rate hike that the Energy Regulatory Commission gave to Meralco.
In finding that the provisional increase is illegal and that the ERC committed grave abuse of its discretion, the High Court vindicates consumers who often fall prey to Meralco’s deception.
The Court’s decision is especially significant at this conjuncture amid the flurry of rate increases within the next few days. We, however, harbor no illusion that the Court decision will deter Meralco and other distribution utilities from imposing new rate increases, knowing how treacherous these corporations are in making additional revenues.
The decision calls for more vigilance from the consumers, as more increases are about to come our way.
With the Supreme Court’s ruling, the next logical step for the ERC is to order Meralco to refund immediately the P0.12/kwh that it was able to collect from January 1 until January 13, when the High Court issued a status quo order against the collection of the said increase.
While we are poised to gain back our P0.12/kWh from Meralco, we are about to lose an estimated 30 centavos/kWh soon: P0.13/kWh to be collected by Meralco and P0.16/kWh to be collected by Napocor for the Luzon grid. This may even increase to about P0.50/kWh if ERC also allows Meralco and Napocor to collect from consumers the P20-billion penalty that Meralco incurred when it reneged in its power supply contract with Napocor.
Thus, FDC calls on the ERC to halt the rate increase this July until Meralco and Napocor have fully explained to the public the grounds for the adjustments. We challenge Meralco to prove that the P0.13/kwh is indeed for their IPPs and nothing goes to the company. Likewise for Napocor, show to us where the rate adjustments will go.
It is unjust and immoral to be made to pay for costs arising from the onerous IPP contracts. Therefore, any rate increase or adjustment due to these contracts should be suspended until all the contracts have been fully reviewed and acted upon accordingly.
We all know that consumers are made to pay even for the electricity that is not generated or consumed because of the “take-or-pay” clause in the IPP contracts. Even the currency and fuel price adjustments are passed on to the consumers because of these burdensome contracts forged by Napocor and Meralco with their respective IPPs.
We dare Meralco and Napocor to disclose to the public the following:
1. How much is Meralco paying for its sources of electricity: Duracom Power, Quezon Power (Philippines) Ltd., its sister companies First Gas-Sta. Rita and First Gas-San Lorenzo, and Napocor. How much is the actual electricity generated by the IPPs contracted by Meralco?
2. How much is Napocor paying for each IPPs? How much power is actually generated by these IPPs? What amendments were made in the contract with these IPPs?
Meralco and Napocor are not the only ones to blame for this triple whammy rate increases; fingers are also pointing to the incumbent administration, which failed to take any decisive action to address the burdensome contracts of both Meralco and Napocor.
Contrary to her pronouncements of lower electricity rates, President Arroyo even allowed Meralco to continue getting expensive power from its IPPs while reducing its off-take from cheaper Napocor plants.
Further, President Arroyo and this administration’s Energy Team plus NEDA and DOF are all mum regarding Napocor’s onerous IPP contracts. Three years have passed since the President’s order to review and renegotiate Napocor’s IPP contracts. Until now, the public has yet to know the real score behind the renegotiations. While this administration claims some US$1.3 billion in savings from the renegotiation, this remains a mere “fiction” to consumers since electricity rates continue to increase and Napocor debts balloon.
Thus, FDC reiterates its call for the distribution utilities and the ERC to halt any rate increases without first explaining the details and bases for such increase. Further, FDC demands from the Executive Branch full public disclosure on the results of the renegotiations with Napocor’s IPPs.
Should the government and distribution utilities fail to publicly disclose information that form as their bases for the rate increase and on their IPPs, consumers will have to resort again to the courts to compel them.