Press Release
April 24, 2008


Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today asked the Senate Committee on Energy to look into the reasons why the Manila Electric Company (Meralco) has increased the electric bills of its customers who are already groaning under the weight of the soaring prices of basic commodities.

Pimentel said that Meralco's rate increases may be justified if one looks only at the rising cost of crude oil which is hitting $120/barrel.

"But there is also Section 23 of EPIRA that obligates electric distribution utilities to supply electricity at the least cost to their so- called captive market," he added.

"It may be true," the senator from Mindanao said, " That Meralco's buying electric power from National Power Corp. (NAPOCOR) and Wholesale Electricity Spot Market (WESM) maybe more costly than buying it from Independent Power Producers (IPPs) like the Sta. Rita and San Lorenzo power plants. The problem, however, is that if Meralco buys electricity from those IPPs, it may be cross-subsidizing them as these IPPs are reportedly owned partially if not fully by Meralco. That would in effect violate the principle that a firm that distributes electricity may not also produce it."

The minority leader said that there is an urgent need to review EPIRA so that customers may be spared from the spiraling cost of electric power by some legal device like mandating Napocor it impose its rate reduction powers on power distributors in times of emergency.

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