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You are
sure deep down that you are being gypped. Yet, at the
same time, you frustratingly admit to yourself you are
utterly powerless to do anything about it. With a heavy
heart, you fork out your hard-earned money just to be
done with it. But you also know this will happen again
and again, perpetually it seems, at least once a month
whenever you get your Meralco bill.
Your
frustration eases a bit only when you realize you’re
only one of Meralco’s captive market of more than 4.2
million households, commercial and industrial
subscribers. Invariably, you end up telling yourself—if
the neighbors, or the rest of the subscribers in most of
Luzon can take all those “punishing charges,” why can’t you?
You find
dubious comfort in the fact that there are so many of
you who are putting up with it. So many who sense they
are being taken in yet continue to pay simply because
they have no choice, being “captive” in every sense of
the word.
There
is, after all, security in numbers. It’s the same sense
of security that the Jews in Auschwitz must have felt
when they were being herded by the thousands into the
gas chambers of that German concentration camp. The fact
that millions of other Jews were similarly doomed
throughout Europe somehow helped them to stoically
accept their fate.
How much
longer Meralco’s subscribers will stoically withstand
the distribution giant’s “punishing” rates is hard to
tell. One thing is sure, though, the grumbling against
Meralco and the clamor for relief is spreading wide and
getting louder each day.
This
column has discussed this issue without letup for the
past 16 weeks. Most of the previous discussions centered
on the flaws of the Electric Power Industry Reform Act (Epira)
of 2001.
The
constant refrain of those discussions was this—that
since the enactment of the Epira six years ago,
electricity rates have followed a skyward trajectory and
put them at levels that are the highest in
Asia. Instead of benefiting consumers, the Epira has proved to be
a boon to only one group of businessmen—the Lopezes.
The
Lopez-controlled Meralco now casts a giant shadow in the
entire power industry, being the largest
electricity-distribution system in the country and
accounting for at least 70 percent of the entire
country’s electricity consumption. What’s sad is the
Lopezes, thanks to the Epira, are now also starting to
dominate the power-generation side of the business
through First Gen Corp.
An
expert in the industry has observed that the Energy
Regulatory Commission (ERC) seems to have abandoned its
mandate to safeguard the public interest in the matter
of power rates. Asking not to be identified, this expert
says the ERC has effectively thrown electricity
consumers to their own devices by helping Meralco
replenish its seemingly inexhaustible repertoire of
rate-increasing schemes. His letter follows:
“The
flaws of the Epira are only half the reason electricity
rates in the Meralco-franchise area are at punishing
levels. The other half is misguided regulation. We seem
to have entered an era where Meralco is voraciously
going after more and more rate increases and really
socking it to the consumers as long as [it] can
obfuscate the rules and find paper justifications. The
sad part is ERC is continuing to fail the Meralco
consumers.
“A case
in point is the recent approval by the ERC of Meralco’s
conversion to a new rate-setting methodology called
‘performance based rate [PBR]’ making. With all its
complexities, the bottom line is it will result in even
higher rates for its subscribers. The new methodology
only gave Meralco more excuses to confuse the consumers
and the regulators and the government to raise rates
further. In its PBR application, Meralco’s greedy and
cheating culture is in full display.
“One
such area is Meralco’s attempt to pad its rate base with
so-called additional expenditures amounting to P2.463
billion, covering ‘regulatory compliance activities, ICT
expenditures and maintenance backlogs.’
“Of
these, Meralco was seeking P1.839 billion just for these
regulatory compliance activities covering PBR, the Magna
Carta, DSOAR, business-separation guidelines and other
guidelines and rules that the ERC will ‘implement in the
immediate future’ for the four-year period 2008 to 2011.
“Independent consultants hired by the ERC discovered
that these ‘are generally normal business processes and
activities that a well-managed distribution business
should be routinely undertaking. No details for the
additional work were provided other than very general
comments.’
“Here is
a supposed public-service utility asking for approval to
pass on P1.839 billion of its expenses to the consumers.
Yet Meralco has not provided the details of the
methodology used to quantify the additional regulatory
compliance work as a result of new regulatory
requirements, nor its estimates of the additional
workload in staff numbers, nor was any information
provided as to the capability of existing staff to cope
with a proportion, if any, of the additional workload.
Consequently, the consultants recommended that only P220
million be approved.
“ERC,
however, disagreed with the consultants’ conclusion and
even described it as ‘inappropriately harsh.’ In Table 5
of its ‘final determination’ dated August 30, 2007, the
ERC approved a total of P358.2 million over the
five-year period from 2007 to 2011.
“Can you
imagine this? Meralco is charging the consumers for the
cost of its finding legal and tricky justifications to
confuse and overcharge its customers.
“Faced
with such resources, pro-consumer groups are
hard-pressed to come up with legitimate arguments to
counter Meralco’s endless requests for additional
charges.
“Meralco
had previously asked for P9.293 billion for ‘WESM
[Wholesale Electricity Spot Market] expenditures.’ The
consultants felt only P129 million could be justified
over the four-year period from 2008 to 2011. We are
still trying to determine how much was actually approved
by the ERC.
“The
point is the extent to which Meralco is trying to
overcharge its consumers is mind-boggling. It certainly
does not deserve to be in public services.
“The sad
part is the ERC, which is supposedly the guardian of the
public’s interest, seems to have fed the consumers to an
insatiable monster.”
Omerta_bdc@yahoo.com |
