Philippine Court Voids Meralco 2004 Add'l Rate Charge -2-
Friday, February 03, 2006
Dow Jones Newswires
February 02, 2006 02:30 ET
Philippine Court Voids Meralco's 2004 Add'l Rate Charge
MANILA (Dow Jones)--The Philippine Supreme Court Thursday canceled a 2004 order by energy regulators that allowed Manila Electric Co. (MERB.PH), or Meralco, to impose an additional charge on users in order to recoup costs already incurred in the purchase of electricity it distributes.
A consumer watchdog group went before the high tribunal to question the June 2004 order by the Energy Regulatory Commission that allowed Meralco to charge PHP3.3213 per kilowatt-hour, up from PHP3.1886 a kWh, without a public hearing.
"Indeed, the basic postulate of due process ordains that consumers be notified of any application - and be appraised of its contents - that would result in the compounding of their economic burden," said the Supreme Court in its ruling.
The court ruling, however, was silent on whether Meralco must return to consumers money already collected under the increased charge.
The court said Meralco's request to the ERC to be allowed to recover the additional cost of purchasing electricity should have been published first to allow consumers time to respond.
Meralco had argued that publication of its petition wasn't required by ERC rules. It added that publishing the petition in a newspaper would only subject its financial claim to a tedious process that would violate its rights.
The Supreme Court rejected Meralco's argument, noting that the ERC is empowered by law to grant provisional rate adjustments pending hearings on a petition.
The court also nullified the ERC rules for the determination of power producers' and distributors' claims for recovery of additional costs of generating electricity because they were not published in the Official Gazette - a record of Philippine laws.
ERC Chairman Rodolfo Albano said the commission will have to appeal the decision of the Supreme Court voiding its rule, which has been in force for a number of years. He said the ERC would also seek clarification on whether the ruling on Meralco's case will affect other companies that have been granted rate adjustments under the same regulations.
Meralco officials weren't immediately available to comment.
Several Supreme Court decisions in the past have required Meralco to refund charges it had collected from consumers even though the fees were approved by the regulators.
posted by philpower @ 9:16 AM,
