A lot of people were both pleased and relieved when the Manila Electric Co. (Meralco) announced that it was reducing its power rates by P0.43 per kilowatt-hour this month.

The announcement came as a total surprise. Meralco subscribers, who have long become wary of its seemingly endless repertoire of overcharging schemes, were naturally flustered by this unprecedented gesture of magnanimity. For over 20 years since the Meralco franchise was handed over to the Lopezes by the Cory government in a silver platter, nobody remembers it ever voluntarily cutting or rolling back its inordinately high power rates.

There was, to be sure, one instance a few years back that is still fresh in the public’s mind. That was when it did give back—albeit grudgingly and in painfully long stages—some P28 billion it had overcharged its customers. It was in compliance with an order of the Supreme Court, which found the utility firm illegally passing on its tax burden to its customers. Still, in this instance, there was no rollback, only refunds for every customer, refunds that its commercial and industrial customers came to enjoy only after a long wait.

Now don’t get your hopes up on this rate cut announced over the weekend by Mr. Elpidoro “Elpi” Cuna, Meralco spokesman. Elpi himself clarified the following day that the rate cut is good only for this month. Next month, he, in effect, says, all bets are off because the rate reduction could easily be erased by an increase in the generation charge.

Any fluctuation in the generation charge, thanks to an order issued by the Energy Regulatory Commission (ERC), will be automatically passed on to Meralco customers.

The ERC cites a pricing mechanism called the Agra, or “Automatic Generation Rate Adjustment.” The Agra, gentle folks, is really nothing but a new name for the much-hated and highly controversial PPA, or purchased power adjustment. In short, it is the same old mangy dog.

Speaking of the ERC, its chairman, former Isabela congressman Rodolfo Albano Jr., has responded angrily in the form of a press release and a long, long letter (that tries to overwhelm you with all kinds of legalese and offcialese) to two of my recent columns (“ERC, rubber stamp of the Lopezes?” on July 18 and “How to read your Meralco bill” on August 1).

My columns, in a nutshell, more or less described how the ERC seems to have totally forgotten its statutory mandate to protect the interest of electric power consumers, specifically in Meralco’s greatly expanded franchise area in Luzon.

Protecting our interest is Albano’s job and there are no two ways about it. It is clearly spelled out under Section 41 of the Electric Power Industry Reform Act (Epira). Yet he seems to be protecting Meralco’s, instead of the public’s, interest as shown by the ERC’s rate-increase approvals and other official orders over the past six years.

In his press release, Albano tries to shunt the blame for the oppressive power rates being imposed within the Meralco franchise area by saying “it wasn’t approved during my time and those practices have been long allowed by law.”

How disheartening, how totally discouraging that sounds, coming from the chairman of such an important regulatory agency, on whose wisdom and integrity the public relies for their protection from predatory pricing practices.

Albano’s quoted statements even echoed Meralco’s constant refrain in its press releases. “The generation charge is only a pass-on charge, Meralco doesn’t make money on it, and Meralco is merely acting as a collection agent for the generation companies.”

Chairman Albano says these things as if he were totally unaware of the fact that a hefty portion of the generation charge is being paid by Meralco to the Lopez-owned generation companies. More and more people are realizing this, but Chairman Albano carries on as if no such thing exists.

This is why at least one concerned consumer group had long asked the ERC under Albano to order the Meralco to further unbundle the generation charges it is passing on to its consumers. The group, called National Association of Electricity Consumers for Reforms Inc. (Nasecore), wanted Meralco to specify, with every billing period, which company supplied and how much that company charged for the electricity that it bought for distribution in its franchise area.

The ERC could have obliged Nasecore, which filed the petition more than two years ago, and simply told Meralco: “For the peace of mind of your customers, give them a more detailed explanation of your generation charges.” But the ERC did no such thing. Instead, it ordered all distribution utilities in the country to post such data on their respective web sites.

That order, of course, was of no practical use to Meralco’s subscribers for whose benefit the petition was mainly filed. To this day, even in its own web site, Meralco refuses to break down its generation charges according to amounts paid at what rates and to which companies. If it can be required to do so, then perhaps the suspicion that the Lopez-owned generating companies are raking it in at our expense could be laid to rest.

The public will be grateful to Chairman Albano if, for once, he would adequately explain why the ERC has ordered that fluctuations in these pesky generation charges be henceforth automatically passed on to us by Meralco under the Agra mechanism. The Agra being merely a substitute for the PPA, Meralco customers can’t help but be leery that this is yet another milking scheme.

The public’s faith in the ERC’s ability or inclination to protect their interests has been greatly eroded because, for one thing, it has allowed power rates in the Meralco franchise area to rise much higher than the power rates being charged by any other distribution utility in the country. The ERC has done absolutely nothing to prevent this despite the fact that from the sheer size of its franchise area, Meralco should be reaping the benefits of economies of scale that could be passed on to its customers.

For Chairman Albano, I have a few questions which he must satisfactorily answer if he wants to reverse the public’s disenchantment over his performance. Do you really agree that Meralco’s return on rate base should be 15.4 percent after adding the corporate income tax? Is it fair or even legal for Meralco to charge its residential and commercial customers for a systems loss of 15.6 percent even in the highly dense and modern load centers in Metro Manila? (Do you agree that this is technically legal because the systems-loss charge averages at only 9.5 percent because industrial customers are charged only 7 percent? Was this scheme not approved under your watch?)

Another question is, do you agree that Meralco should again be entitled to pass on to its customers the P28 billion in damages it must pay the government for violations of its 10-year supply contract with Napocor? I heard you were just biding your time before allowing Meralco to pass on this huge amount to its hapless, captive market.

And, of course, the biggest question is how much longer do you plan on staying as ERC chairman?

Omerta_bdc@yahoo.com

AS expected, some labor groups slammed the P12 wage hike granted by the National Capital Region-Regional Tripartite Wages and Productivity Commission, with one describing it as “nothing but alms,” and another saying it’s only good to pay for noodles and eggs. What the workers need, the militants say, is an additional P125 daily-wage increase.

Greetings from Coolum, Australia, where Apec finance ministers just wrapped up a most illuminating meeting.  

Dear Judge Oscar Pimentel,

In the Enchanted Kingdom, they play a game called “Upside Down.” They hail the railroaded junking of two impeachment complaints as “constitutional democracy,” they dismiss dagdag-bawas as “clerical error,” and they call a law endangering human rights the Human Security Act.

The Bureau of Internal Revenue (BIR) recently started two initiatives to improve tax administration, and it expects both moves to yield positive results and help the government collect much-needed tax revenues.

A lot of people were both pleased and relieved when the Manila Electric Co. (Meralco) announced that it was reducing its power rates by P0.43 per kilowatt-hour this month.

Man simply cannot afford to be sick, especially older men and women, because being sick is such an awful hassle and having a lot of people you don’t even know telling you what to do.