The Freedom from Debt Coalition registers its opposition to the provisional authority that the Energy Regulatory Commission granted to Meralco, allowing the distribution utility to increase its rates by P0.12 per kWh starting January 2004.

Further, FDC demands the immediate revocation of the said provisional relief.

The provisional authority granted to Meralco is bereft of merit because Meralco failed to substantiate its claim. FDC, together with other oppositors to Meralco’s rate increase application, has repeatedly demanded the ERC to order Meralco to produce additional documents to support its application for a rate hike.

Since Meralco failed to produce these documents, what is the ERC’s basis for granting the provisional authority? How did the ERC come up with the decision in the first place?

The law is clear on the requirements before any provisional relief is granted to an applicant: Together with the written application, there should be supporting documents attached and any comments or pleadings of parties concerned (Rule 3, Section 4(e) of the Implementing Rules and Regulations of Republic Act 9136).

Pending Meralco’s compliance, no hearing should be conducted and the status quo before the ERC granted the provisional authority should be upheld.

The 12-centavo rate increase has no basis in established good business practice. Capital expenditures and long-term investments should be funded from stockholders’ equity, or from appropriated/unappropriated retained earnings of the firm.

Thus, consumers should not be forced to pay for Meralco’s investments because they are neither Meralco stockholders nor have they been consulted on the necessity of these investments. In attempting to appeal to the public’s understanding, Meralco will find no sympathy from its consumers, who continually bear the burden of paying for high electricity rates.

On the other hand, the fact that Meralco is funding its capital expenditures from consumers’ payments should be a source of alarm: Meralco’s bleak financial position speaks volumes on the way that the present management handles the firm. Consumers should not suffer the cost of the Meralco management’s inability to run the firm efficiently and effectively.

FDC reiterates its urgent demand for the ERC to revoke Meralco’s provisional authority to raise its electricity price. As protector of the public’s interest, the ERC is should perform its mandate and protect the public.

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