Concepcion denounces ‘judicial interference’ on Meralco ruling

Consumer advocate Raul T. Concepcion denounced yesterday the "judicial interference" of the Court of Appeals (CA) on the rate adjustment of the Manila Electric Co. (Meralco).

"This is judicial interference and it will have an effect on the attitude of local and foreign investors at a time when government is aggressively encouraging investments in capital-intensive industries like power," Concepcion, chairman of the Consumer Oil and Price Watch (COPW), said in a press briefing.

The Energy Regulatory Commission (ERC), which approved Meralco’s 17-centavo per kilowatt hour (kwh) rate increase in March last year, is an independent regulatory body.

According to Concepcion, the CA "has no business deciding whether Meralco deserves a rate increase or not."

"The CA undermined the ERC’s integrity and independence when it annulled the ERC’s unbundling rate hike order. It ordered the ERC to hold new hearings and it ordered the Commission on Audit (COA) to check on the books of Meralco before its petition for unbundling could be granted," the industrialist said.

Concepcion said the COA should complete its audit in 90 days after the ERC has rendered any decision on rate increases.

"A COA audit is now a new requirement for a Meralco rate increase or rate increases of other power companies being considered by the ERC," he said.

Energy Secretary Vincent S. Perez shared the same sentiment, appealing to the courts to give the ERC the "benefit of the doubt".

"The judicial courts, in many economic and political concerns including energy-related matters, have time and again proven to be the people’s bastion of hope. While we respect its decision, we also make an appeal to our courts to allow the ERC, also an independent body, to exercise its competence and proficiency in resolving highly complicated and technical power issues," the DOE official said.

ERC chairman Rodolfo Alabano, for his part, said they would file for a motion for reconsideration of the case, saying the CA order smudged the integrity of the commission.

"We have five days from date of receipt of the CA order to file a motion for reconsideration of the case. It has affected our credibility and eroded the independence of the ERC," Albano said in a phone interview.

The CA remanded to the ERC the 17-centavo per kwh increase in power rates approved by the commission in May last year. The rate hike covers 8.35 centavos per kwh for generation and transmission charges and 8.65 centavos per kwh for distribution. The rate adjustment was implemented by Meralco starting June last year.

The CA also directed the COA to check the books, records, and accounts of Meralco.

"We do not agree on this. This meant that we would have to refer our case to the COA every time we are deliberating an application. What is our role? We are an independent body here. If the CA will not grant our request then we will go the Supreme Court," Albano said.

Under its unbundled rates, Meralco also provides for graduated discounts to residential customers consuming within 100 kwh per month which the ERC considers as lifeline users. As of April 2003, these customers reached 1.33 million, representing 34 percent of Meralco’s 3.96-million customer base.

The residential users consuming between 51 to 70 kwh are entitled to a monthly discount of 35 percent while those consuming from 71 to 100 kwh gets a 20-percent discount on their monthly bill.

"The CA decision will mostly affect our lifeline customers or those consuming within 100 kwh per month as they will lose the subsidy granted under the unbundling decision of the ERC and will therefore have to pay higher rates. With the CA decision, this subsidy will no longer be available and as such these poorer customers will have to pay more for their electricity," Meralco spokesperson Elpi Cuna said.

The unbundling of charges of all electric utilities is in compliance with the Electric Power Industry Reform Act of 2001.

"We merely followed the law. As mandated by the EPIRA, we filed our petition for unbundling on Dec. 26, 2001. The ERC decision on Meralco’s unbundling came out on March 22, 2003 after almost a year and a half of extensive regulatory proceedings and public scrutiny, including the conduct of 55 public hearings participated in by 18 organizations and interested parties," Cuna said.