19 June 2006
The Freedom from Debt Coalition today urged the Energy Regulatory Commission (ERC) to junk the 14.76-centavo rates increase petition of Meralco.
In a picket at the regulatory body in Ortigas, Pasig, the group said that Meralco’s petition stands on shaky ground as the basis it used in asking for increase was already nullified and set aside by the Court of Appeals on 22 July 2004.
The 14.76-centavo rates increase was based on a new rate methodology for determination of profit margin called Weighted Average Cost of Capital that was approved by the ERC in its 30 May 2003 decision on ERC Cases 2001-646 and 2001-900.
The group stressed that the 14.76-centavo rates increase petition was a result of Meralco’s profit margin computation based on a 15.93 percent return on rate base (RORB) following the WACC rate methodology approved by ERC on 30 May 2003. The 15.93 percent RORB is way above the 12 percent RORB ceiling adopted in the Philippines for public utilities such as power.
FDC said that ERC should not allow consumers’ tragic experience with Meralco’s overcharging in 1994 to happen again. The coalition said that it seems such history is happening again under the present case where Meralco filed a motion for reconsideration for the Court of Appeals’ decision while it continues to pursue its rates increase application basing on an order nullified by the Court. If approved, the could be another nightmare to consumers.
Further, the group asked the ERC that it should also apply to Meralco’s case what it did with pending generation rate adjustment mechanism (GRAM) application where it suspended approval of pending GRAM applications until its Motion for Reconsideration filed at the Supreme Court is finally settled.
The Supreme Court also nullified ERC’s order in 2003 granting Meralco’s GRAM application.
To symbolize their protest, members of FDC stage a “die-in” at the steps of the main entrance of the Pacific Center Bldg where ERC is hearing Meralco’s petition.##