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AS the
Energy Regulatory Commission (ERC) paved the way for the
refund of more than P2 billion in meter deposits to
customers of the Manila Electric Co. (Meralco) and other
distribution utilities, Government Service Insurance
System (GSIS) chief Winston Garcia made it clear at the
weekend he was not quite done with his self-described
crusade to bring down rates charged by the country’s
biggest electricity distributor.
He said
he will put an end to the era of high power rates once
the GSIS assumes control of Meralco, where the national
government has a 35.7-percent stake—of which 25.5
percent belongs to the pension fund; the rest or roughly
10 percent of which is held by government housing agency
Pag-IBIG fund, the state-owned Land Bank of the
Philippines and the Social Security System.
“My
first order of the day would be to remove the
take-or-pay provision provided for in Meralco’s
contracts with the independent power producers [IPPs].
From the very beginning, this is already against the
power industry law and its franchise,” he said,
signaling a determination to continue his boardroom
battle with the
Lopezes, owners of 33.7 percent of Meralco, who have
steered the utility through wars, a dictatorship that
caused them to lose it, and major economic and political
crises the past several decades.
The
president and general manager of the state-owned pension
fund spoke before the Filipino-Chinese members of the
Anvil Business Club Friday evening. In his speech,
Garcia reiterated the alleged misconduct of the Manuel
Lopez-led management of Meralco, which, as a result,
translates to expensive electricity charges.
Citing a
study, he said Meralco passed on to its customers
(through power rates) almost P22 billion last year,
representing costs of unused gas and lease of Santa Rita
and San Lorenzo plants in Batangas. The gas-fired power
plants are owned and operated by First Gen Corp., a
member of the Lopez group.
“Section
23 of the power law and Section 4 of the Meralco
franchise impose the obligation to supply electricity to
its captive market in the least cost manner. But it is
not happening today. Meralco is required to buy at a
certain volume, at a certain price, from its IPPs even
if it could get a cheaper price elsewhere,” he said.
If he
can make a successful takeover of the company, he said
he would immediately raise the power purchased from the
National Power Corp. from 35 percent to 70 percent,
evenly distributed on peak and nonpeak hours.
Garcia
also disclosed plans of creating an independent body to
review the system loss of Meralco.
“We need
more transparency and serious efforts to curb them,” he
said. System loss refers to electricity lost while in
the delivery process and pilferage.
And to
cut down on expenses, Garcia said he would push for the
introduction of prepaid cards for power usage.
“This
would not only stop pilferages, it would also reduce
expenses on meter installation and manpower,” he said.
All
these plans, however, may be put in the backburner
because of ongoing legal battles involving Meralco
issues.
The
Lopez bloc is still “untouchable” in Meralco after it
won against corporate regulator Securities and Exchange
Commission (SEC) and GSIS, temporarily stopping the
investigation into Meralco’s alleged defiance of an
order on the use of proxy shares.
Lopez,
reelected chairman of the power distribution utility
firm at the stockholders’ meeting on May 27, and allies
Jesus Francisco, Felipe Alfonso, Christian Monsod,
Anthony Rosete, Elpidio Ibañez and Francis Giles Puno,
secured from the Special Ninth Division of the Court of
Appeals (CA) a temporary restraining order (TRO)
stopping for 60 days proceedings on the protested cease-
and-desist order (CDO) handed down by the SEC late May
26.
The GSIS
had filed with the SEC on May 26 a complaint against
Meralco officials on alleged illegal solicitation of
proxy shares. It was the basis used by the commission
for issuing the CDO, citing the validity of the
complaint and its violation of the Securities Regulation
Code.
But with
the CA ruling, the complaints lodged against the Lopez
group were considered moot and academic, at least for
the meantime.
The SEC,
meanwhile, will abide by the order of the CA and submit
comments within the prescribed 10-day period given them.
Commission secretary Gerard Lukban, who received the CA
order, said the SEC will not file a motion to lift the
TRO.
And
because the commission is temporarily hands-off on the
Meralco issue, Lukban said everything is status quo and
the Lopez bloc remains valid members of the board.
The
Meralco board is composed of five members from the Lopez
bloc, four from the government side and two independent
directors.
Meanwhile, Meralco customers are expected to get some
relief from high rates with the announcement by ERC
Chairman Rodolfo Albano Jr. that the regulator has
approved the Rules to Govern the Refund of Meter
Deposits to Residential and Nonresidential Customers on
June 4, following completion of public consultations and
commission deliberation on the draft rules.
Albano
said the Magna Carta for Residential Electricity
Consumers and the Distribution Services (Magna Carta)
and Distribution System Open Access Rules (DSOAR)
promulgated by the commission on June 17, 2004 and
January 18, 2006, respectively, provided the basis for exempting
electricity consumers from paying meter deposits.
The
rules aim to provide distribution utilities (DUs) with
parameters for the refund of meter deposits and
interests thereon, according to Albano.
The
rules require the refund of meter deposits to commence
not later than six months from the rules’ effectivity in
the case of private distribution utilities, including
Meralco customers, and within 24 months in the case of
nonstock and nonprofit electric cooperatives (ECs).
Private
DU customers are entitled to interest income on their
meter deposits in accordance with the rates stipulated
in the rules.
Residential customers as well as nonresidential
customers who paid their meter deposits prior to the
effectivity of ERB Resolution 95-21 Standard Rules
Governing Electrical Power Services promulgated on
September 22, 1995, will be entitled to 6-percent per
annum interest.
The ERC
said meter deposits paid from the effectivity of
Resolution 95-21 until the day prior to the effectivity
of the Magna Carta for residential customers or DSOAR
for nonresidential customers will earn an interest of
10-percent per annum.
Meter
deposits paid from the effectivity of the Magna Carta or
DSOAR until the day prior the start of the refund will
be entitled to an interest of 6 percent per annum.
ERC
explained that the payment of 6-percent or 10-percent
interest will depend on when the meter deposit was
paid. At the customers’ option, the mode of refund of
the deposit and interest shall either be in cash, check,
or credit to the customer’s future monthly billings or
as an offset to other due and demandable claims against
the customer.
Customers of electric cooperatives shall get their
deposits back but without any interest since ECs do not
earn any profits. The modes of their refunds are almost
similar to those of private distribution utilities,
except that EC customers have the option to convert
these deposits as contributions (equity), which must be
recorded in the financial books of the co-ops.
ERC said
customers applying for refunds must present valid proofs
of identification and registration (like bills) as such.
The
rules will be posted on the ERC web site, submitted to
the University of the Philippines Law Center Office of
the National Administrative Registrar and published in a
newspaper of general circulation. The rules take effect
15 days after the newspaper publication. |
