Revoke Meralco’s License and Repeal EPIRA!

Meralco, the electricity monopoly, threatened its 5.3 million consumers with brownouts if the temporary restraining order (TRO) on its scandalous 4.15 peso per kilowatt hour is not lifted.


The threat was made by Meralco lawyer Victor Lazatin during the Supreme Court hearings on the rate hike on Feb. 4.
Consumers will not tolerate this blackmail.  

On the pretext of losing vast amounts of money, this monopoly, which made 17 billion pesos in profits in 2013, is trying to derail the investigation of its role in the suspicious series of events that led to the rate increase.  Meralco has put the blame on seven of its power suppliers that went offline when the Malampaya natural gas plant underwent maintenance from Nov. 11 to Dec. 10, 2013, allegedly forcing Meralco to go to the Wholesale Electricity Spot Market (WESM) for its power deficit.  But documents submitted to the Supreme Court showed that it was Meralco’s order to a power supplier--Therma Mobile—that it controls to bid at the maximum allowable price of 62 pesos per kilowatt hour no less than 25 times during that period that was responsible for the skyhigh clearing price at WESM.

Meralco gamed the market to benefit itself and other power producers.  By doing so it defrauds its consumers whom it is obligated to supply electricity at the least possible cost.  Moreover, Meralco would not have resorted to buying at WESM’s inflated prices had it made provisions for replacement power from its suppliers in the event of a foreseeable event like the Malampaya shutdown. As President Aquino himself has said, ““There is periodic maintenance [of Malampaya] required.  That’s a foreseeable event.  If you know what producers of fuel will not be able to produce, then you have to find a substitute.  So preparation should have been made for foreseeable events.” 

But the problem goes beyond Meralco. It goes beyond the Energy Regulatory Commission, which is the classic example of a regulator that is in the pocket of the regulated.  It goes beyond the Department of Energy, which has shown itself to be completely incompetent in planning for the energy needs of the country.  The main source of the problem lies in the Electric Power Industry Reform Act (EPIRA), which placed the whole industry under the gang rule of private power – first in the generation and transmission sector, and now in electric cooperatives in the distribution sector.

Privatization has resulted in monopoly control, inefficient power delivery, and sky-high prices, not in more efficiency, less concentration, and lower prices.  Meralco, whose profits have risen over 100 per cent since EPIRA went into effect in 2001, is a monstrous example of EPIRA’s failure.

13 years of exploiting consumers is enough!  We demand the revocation of Meralco’s mega-franchise license and the repeal of EPIRA.


February 10, 2014

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