Wanted: P2 cut in power rates

Notice how Manila Electric Co. (Meralco) has lately tried to mollify its irate customers by announcing two token power-rate reductions in May and June?

The two successive (but insignificant) rate cuts it carried out in the last two months were apparently intended to reverse growing public disenchantment over how the Lopez group has been running the giant utility.

But the rate cuts were simply too little and too late to make a difference.

The impression that Meralco has willfully violated the mandate of its franchise (to procure the power it distributes at the least cost) is just too deeply etched in the minds of its 4.4 million customers.

For the month of May, Meralco proudly announced that it had cut by 50 centavos per kilowatt-hour (kWh) your total monthly power bill for that month. This was made possible by the ebb of electricity prices at the WholeSale Electricity Spot Market (WESM), from which it procures 10 percent of the power it distributes.

In June, Meralco again triumphantly announced that henceforth, the generation charge in your monthly power bills would be 30-centavos less per kWh.

Actually, it was the state-owned National Power Corp. (Napocor) that volunteered to slash its generation rate by 71 centavos per kWh. It asked the Energy Regulatory Commission (ERC) to make the reduction official by “ordering” Napocor to implement the cut.

By the way, the 50-centavo per kWh reduction that Meralco imposed on itself in May was good only for that month. Meralco customers who think the total rate reduction added up to 80 centavos per kWh can only be dreaming. The bigger rate cut was superseded in June by the 30-centavo reduction “ordered” by the ERC.

But why only 30 centavos per kWh lower, when Napocor’s total rate was rolled back by 71 centavos? Meralco’s answer: only 40 percent of the power it buys comes from Napocor; ergo, Meralco can only lower its generation charge by 30 centavos, not 71 centavos per kWh.

This rate cut is nothing compared with the many successive power-rate increases Meralco has imposed on its customers over the past six years.

Records of the ERC show that Meralco charges the highest commercial and industrial power rates in the country today. While other much smaller electricity distributors are charging a total of P6 to P7 per kWh, Meralco charges its customers between P10 and P11 per kWh.

This is the very basis of the promise by Winston Garcia, president-general manager of the Government Service Insurance System, to slash Meralco rates by at least P2 within two months after management control of the giant utility is wrested from the Lopez group. The promised P2 reduction would only be for starters, Garcia vows.

Garcia proposes to fling open Meralco’s doors and financial records to expose all the hidden charges that have made Meralco power rates the second-highest in Asia.

The fact alone that the Lopez-controlled Meralco buys 55 percent of its power requirements from Lopez-owned power-generation plants says a lot. How can the public continue to tolerate this glaring example of self-dealing?

You can bet a whole year’s equivalent of your electricity bill that the Lopez group would fight tooth and nail, spare no expense or do anything in its power to retain its stranglehold on Meralco even if it owns only 33.4 percent of the company.

Right now, even with its 35.7-percent stake in the utility firm, the government has been stymied in its takeover bid by a controversial restraining order issued by one of the justices of the Court of Appeals. It may take another month or so before Meralco customers can expect the benefits of a successful takeover to finally come their way.

What’s ironic is that despite its proven propensity to overcharge its customers, Meralco under the Lopezes has not been held accountable by Congress for violating the Electric Power Industry Reform Act and the very terms of its own franchise.

What’s amazing is that in the face of widespread public mistrust, the Lopez group continues to believe it should exercise perpetual control over Meralco. The Lopezes should be told there is nothing they can do—short of slashing Meralco’s present rates by at least 30 percent—that would restore the public’s shattered trust. Their management presence in Meralco is both indefensible and downright untenable.

 Omerta_bdc@yahoo.com

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