Energy regulator scores court ruling vs Meralco rate hike
Tuesday, February 01, 2005
Energy Regulatory Commission (ERC) Chairman Rodolfo B. Albano, Jr. yesterday said the recent Court of Appeals (CA) decision nullifying Manila Electric Company's (Meralco) 17-centavo per kilowatt-hour rate increase and unbundling of rates has put a dent on the commission's "integrity."
The ERC chief also expressed "great disappointment" over the court ruling that denied Meralco's motion for reconsideration.
"The CA's verdict undermines the integrity and credibility of the ERC as a quasi-judicial and independent regulatory body. It puts into question the competence of the commission in exercising its powers vested in it by Republic Act 9136," he said in a statement.
In its decision, the appellate court upheld its earlier ruling that reversed an ERC decision allowing the unbundling of rates by Meralco.
The court said the ERC failed to require an audit of the power firm's books and accounts.
The court also remanded the case to the ERC for further proceedings, including the conduct of an audit by the Commission on Audit.
Lopez-led Meralco earlier said the ruling would have severe effects on the distribution firm's viability. Company president Jesus P. Francisco said his firm would elevate the matter to the Supreme Court.
The ERC, in its May 30, 2003 order, approved new unbundled rates for Meralco that were implemented in June last 2003 allowing the utility to increase its rates by 17 centavos per kilowatt-hour.
The increase was broken down as follows: 8.35 centavos per kilowatt-hour for generation and transmission and 8.65 centavos per kilowatt-hour for distribution.
Unbundling petition aims to break down and itemize power companies' rates. Meralco's petition for unbundling is in compliance with the Electric Power Industry Reform Act.
The unbundling of Meralco rates provided substantial discounts to residential customers consuming 100 kilowatt-hours per month, or those with lifeline rates. These lifeline users enjoyed a reduction in their electric bills of over P100 per month starting June 2003 and are accorded monthly discounts of 50%, 35%, and 20% under the unbundling, Meralco said.
Implementation of the Court of Appeals decision means substantially increasing the rates to these very small customers, the distributor has said.
Lifeline customers account for more than 1.6 million Meralco customers in December 2004, representing over one-third of the firm's 4.2 million customers.
The Lopez-led firm was the first private utility in the country to be allowed unbundling of rates. -- Bernardette S. Sto. Domingo
posted by philpower @ 5:24 PM,
