Press Release
October 23, 2008

Justify first 2003 rate hike, Loren asks Meralco

Meralco cannot be allowed by the Energy Regulatory Commission (ERC) to raise its power rates anew without first justifying, as mandated by the Supreme Court, its provisional rate increase in 2003.

Senator Loren Legarda made these remarks yesterday as she challenged both the ERC and Meralco to "lift the veil of secrecy" surrounding the ERC-approved rate hike of Meralco, amounting to 14 centavos per kilowatt hour (kWh).

"What's the basis, what are the figures?" asked Legarda. "What computations were used by the ERC and Meralco to foist this increase on the 4.4 million Meralco customers?"

Legarda said that the SC-mandated audit of Meralco's financial records by the Commission on Audit (COA) was intended to determine whether or not Meralco's 2003 provisional rate increase was justified.

COA has yet to start the audit and Meralco has yet to justify the 2003 increase, yet here comes the ERC approving another Meralco hike, Legarda lamented.

According to Legarda, the ERC must be judicious in tackling Meralco's petitions for power rate hikes, saying the ERC must never forget its to protect the interest of the consumers.

"The ERC is vested with quasi-judicial power precisely so it can do what is right, and determine if and when a power firm is taking advantage of consumers," she said.

"I ask ERC to review its decision which seemed to have been made in haste and without proper consultations with all the affected parties."

Legarda brushed aside pronouncements from Malacañang that Meralco's hike may be too small to really affect consumers.

The Chair of the Senate Committees on Social Justice and Economic Affairs said the 14-centavo/kWh increase is a "heavy burden" to the poor, more so when there are three million Filipino families going hungry.

Meralco's hike came at a time when the country is still recovering from the shock of worldwide economic slump.

Legarda also noted with dismay concerns raised by various consumer groups, such as the National Association of Electricity Consumers for Reforms (Nasecore) and the National Labor Union (NLU), over the lack of transparency of Meralco in dealing with consumers.

The NLU had earlier asked whether the power rate hike which Meralco will start collecting next month has anything to do with the maturing loan obligations of Meralco and its affiliate companies.

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