It’s unfortunate that we have regulators who make bad decisions that may crush the life out of private enterprise. Worse, we have unelected bureaucrats who try to make private companies look bad to enhance their own image. Such was the fate that befell the Manila Electric Co. (Meralco), which was accused by the Energy Regulatory Commission (ERC) of “overcharging” its customers.
A press release uploaded on the ERC web site on May 3 said: “Consumers will save approximately P0.7541 per kilowatt-hour per month on their electricity bills until July 2017, after the ERC directed Meralco to immediately refund P6.9 billion in overcharges collected over the past three years.” Interestingly, the press release, which quoted suspended ERC Chairman Jose Vicente B. Salazar as saying the refund “should be reflected in the May 2017 billing so Meralco customers will feel its effects right away,” has been taken down from the ERC web site.
It could be recalled that President Duterte suspended Salazar on May 2 due to corruption allegations. The ERC chief is facing a number of administrative charges, such as dishonesty, gross neglect of duty, grave misconduct, gross insubordination, violation of the Government Procurement Reform Act, Anti-Graft and Corrupt Practices Act and the Code of Conduct and Ethical Standards for Public Officials and Employees. “I just suspended Salazar because of corruption. I will eventually remove him,” the President said.
The controversial ERC press release made it appear that Salazar was the one who “discovered” Meralco’s alleged “overcharging” when, in fact, he got his facts from Meralco’s petition to the ERC. Meralco has asked the regulatory body to approve its petition and issue the corresponding order allowing the utility company to refund consumers of around P6.9 billion. Commissioner Josefina Asirit said they are “trying to get to the bottom of it because the Commission did not authorize anyone to issue a press release or upload anything on the ERC web site”.
Insisting there had been no overcharging, Meralco described the P6.9 billion as a “technical correction” filed by the firm itself to reflect adjustments on actual revenues over the past three years. What this means is that Meralco’s rates are determined by customers’ usage patterns in the previous month, which are sometimes different from actual demand, the reason the utility files the correction every three years for the ERC’s review.
Under its charter, the ERC allows distribution utilities to file their respective consolidated applications every three years for the confirmation of pass-through charges, which is why Meralco has asked the regulatory body for authority to refund consumers nearly P7 billion worth of over-recoveries incurred from 2014 to 2016. It wants to refund generation charges, transmission charges and system loss rates, among others.
Fortunately, all is well that ends well. The ERC has confirmed the previous decision on Meralco’s application, which was issued prior to the suspension of Salazar. In other words, the ERC has given the green light for the refund. Meralco said the refund will be carried over to the June billing cycle, which is good news for Meralco consumers.