Freedom from Debt Coalition (FDC) calls on Congress to revoke the legislative franchise of MERALCO  in accordance with the supreme principle of public welfare to end MERALCO’s predatory pricing, market abuse and other malpractices that harm the consumer public, even the government.


 

This should give way to a democratic power distribution set up that can provide the consuming public affordable rates and quality and stable supply of electricity.

FDC also calls on Congress to look into the ownership structure of MERALCO which may have compromised the nationality provision of the Constitution.

The government must look into the veracity and implications  of a  media article today, February 10, 2014  (  Rigoberto Tiglao, Manila Times, pp. 1, 5 ) which cited  that Indonesian tycoon Anthoni Salim’s First Pacific Co.’s Annual Report claims that its “ intermediate holding companies , subsidiaries and affiliates “ hold 50 percent shares of MERALCO.

From one Congressional ( House and Senate Energy ) committee hearings to another held during the last two months,  MERALCO officials always failed to answer the most telling and revealing arguments raised by consumer, labor and partylist groups against their petition for a P 4.15 electricity power rate hike last December 2013 and which was suspended by a Supreme Court TRO.  These are :
        1. MERALCO committed imprudence by not including a power replacementprovision in their Power Supply Agreement with their power generationcompany suppliers First Gen and Kepco in case of scheduled maintenanceshutdowns of Malampaya 
        2. MERALCO offered to WESM and bid at the maximum price of P62/kwh  its 100MW contracted supply from Therma Mobile of Aboitiz Power at a time when it was claiming a power supply problem
        3. MERALCO in negotiating a contract with power generation companiesfailed to make the latter take into account its insurance claims againstforced outages instead of passing the cost automatically to consumers


In the Supreme Court hearing on this issue last week,  MERALCO again failed to explain satisfactorily the points raised against its price hike petition.  It once again issued an earlier threat of power outages unless the Supreme Court lifted its TRO. 


That MERALCO has the gall to argue this way and blackmail the public and even the government attests to the inordinate power it has attained through several decades of monopoly hold on the power distribution industry and its privileged relations with all those who held power in Malacanang since EDSA I.

 

CORPORATE GREED

 

FDC recalls some of the examples of MERALCO’s corporate greed in the past :

1. MERALCO’s violation of Contract to Sell Electricity (CSE)  to NAPOCOR which denied  NAPOCOR and therefore the government of  P27 billion; others claimed  the amount could be P44 billion;

2.MERALCO skirted around and in effect defied the Supreme Court decision that corporate income tax cannot be charged by utilities to the consumers by tacking it on the weighted average cost of capital under the PBR scheme;

3.MERALCO attempted to increase its bill deposits despite a P26 billion accumulated bill deposit account it already has, and despite ERC-grantedprovisions for bad debts and for working capital to cover energy purchases in advance 

4.P24 billion grant by the ERC to MERALCO for under-recoveries or compensation for delays in the implementation of rate adjustments; and

5.MERALCO shortchanged the consumers who were entitled to a refund under the Supreme Court 2004 decision of a P30 billion refund by offsetting the refund against current and future consumption which in effect eliminated the refund because all costs and expenses necessary for providing electricity had been and continue to be charged to consumers.

 

FDC will continue to mobilize local protest actions before MERALCO branches throughout the Meralco franchise areas in Metro Manila and other parts of Luzon.


February 10, 2014

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