PHILIPPINE NEWS SERVICE — SENATOR Loren Legarda stressed yesterday that Manila Electric Company (Meralco) must abide by the term of its franchise requiring it to provide electricity to its captive customers at the least cost to them.
Legarda pointed out that the same admonition to distribution utilities (DUs) like Meralco had been included in the provisions of the Electric Power Industry Reform Act (EPIRA) precisely to protect consumers from overcharging by DUs.
“This is something that DUs cannot brush aside: the mandate to provide the cheapest available electricity to their customers,” said Legarda.
The senator called on Meralco not to increase its power rates, said to be already among the highest in the world, in the face of reports that it continues to buy power at exorbitant rates from independent power producers (IPPs) owned by the Lopez family.
The Lopezes control Meralco and the DUs purchase of power from its own IPPs had been the subject of controversies, with the power purchase contracts between them dubbed “sweetheart deals” in congress.
Legarda noted with dismay the revelation of the consumer-advocacy group Nasecore that Meralco’s own website showed that it bought more expensive power from Lopez IPPs last month.
Nasecore stands for National Association of Electricity Consumers for Reforms.
The group said Meralco bought more than 50 percent of its power needs from Lopez IPPs at an average cost of P5.38 per kilowatt hour (kWh), even if Napocor’s price for the same kWh for the month of August was only P3.57, while the electricity spot market (WESM) pricing was only P3.09 per kWh.
Legarda said that utilities like Meralco can be stripped of their franchises if they are found to be violating their provisions.
“Meralco must show a social conscience by not increasing its rates unnecessarily and by showing, with full transparency, that its increases are justified,” Legarda said.
The Supreme Court had ordered an audit of Meralco’s financial statements, records and transactions in 2006 to justify its provisional power increase in 2003.
The SC tasked the Energy Regulatory Commission (ERC) and the Commission on Audit (COA) to coordinate in conducting the audit of Meralco.
Legarda said that Meralco must take the COA audit as an opportunity to prove that its operation and its charges to consumers are in order.
“But a refusal to be audited will not be seen kindly by our people, more so by Meralco consumers, especially in the face of complaints of overcharging against the company.”