Meralco denies P200-B overcharging claim
Distributor Manila Electric Co. (Meralco) denied a lawmaker’s claims that it had allegedly been overcharging its customers since 2012, pointing out that its rates were approved by the Energy Regulatory Commission (ERC), and that it could not unilaterally set its own distribution rates.“I would like to reiterate that as a highly regulated entity, Meralco strictly adheres to the rules governing its operations and franchise, and the rates we implement always have prior approval from the regulator,” Meralco first vice president and regulatory management head Jose Ronald Valles said in a statement over the weekend.
This was in response to Santa Rosa City Rep. Dan Fernandez’s call in a recent hearing of the House committee on legislative franchises for the distributor to refund around P200 billion in supposed overcharges to its customers.
Meralco submits its proposed distribution rates to the ERC for approval before these are applied in customers’ electricity bills. Meralco has applied for a rate of P1.3522 per kilowatt-hour for the regulatory years 2023 and 2024.
Despite Fernandez’s allegations, Valles noted that Meralco was the “only private distribution utility that has made a distribution refund in compliance with ERC directive.”
He was referring to a P48-billion refund ordered by the ERC that it had implemented “in a timely manner” this year.
Meralco also cited a recent study by global firm International Energy Consultants, which the distributor said had concluded that its rates were “fair and reasonable,” as power costs in other countries were subsidized by their respective governments.
“This was the result of the company’s constant efforts to source the least cost available supply through, among others, the conduct of a transparent competitive selection process (CSP),” it said.
CSP is the bidding process that power suppliers must undergo before providing power to a distribution utility such as Meralco.
Valles also dismissed as “baseless and malicious” the claims that Meralco’s terms of reference for its CSPs were supposedly tailor-fitted to favor certain generation companies.
“Our past CSPs conducted are proof that no such tailor-fitting is happening,” he said.
In another House committee on legislative franchises hearing last week, the ERC warned the company not to engage in “anticompetitive practices,” particularly for a scheduled bidding for 1,800 megawatts (MW) of crucial power.The regulator had told Meralco to ensure that it was not “unduly limiting” the number of potential bidders for the capacity that must be available by next year.
So far, there are six potential bidders for the upcoming CSP: Aboitiz-led GNPower Dinginin Ltd.; the Lopez family’s First NatGas Power Corp.; businessman Leandro Leviste’s SP New Energy Corp.; and conglomerate San Miguel Corp.’s Mariveles Power Generation Corp., Excellent Energy Resources Inc. and Masinloc Power Partners Ltd.
“We already raised with Meralco our concerns on the limited number of potential participants that could participate [in the CSP],” ERC Chair Monalisa Dimalanta had told lawmakers. INQ
