Meralco in crisis after refund order

The Manila Electric Co. (Meralco) faces serious financial problems, including possible bankruptcy, after the Supreme Court ordered that it refund consumers billions of pesos it overcharged its customers since 1994, company officials said yesterday.

"We are in deep financial trouble right now. We are in restructuring mode with our creditors, which is worsened by the court’s decision," Meralco spokesman Elpi Cuna said.

While the refund was estimated to reach P28.15 billion, Cuna said the actual value of the refund and the length of time for repayment would be determined by the Energy Regulatory Commission (ERC).

Malacañang disclosed yesterday that it is exploring options to balance the SC decision with the need to keep the Lopez-owned firm viable to ensure uninterrupted electricity supply.

"Because we all know, Meralco is important to provide supply of electricity so it’s very important to keep the firm viable," Presidential Spokesman Ignacio Bunye said.

In the execution of the SC decision, the Catholic Bishops’ Conference of the Philippines-National Secretariat for Social Action Justice and Peace (CBCP-NASSA) urged the government to ensure transparency and accountability.

"As a public utility imbued with public interest, Meralco is accountable to the people it serves. This reminds us that we are duty-bound to demand accountability from such utilities," it said in a statement.

Similar calls were made yesterday as various groups scrambled to put forward suggestions on how the power firm can comply with the final ruling of the High Court.

Davao Rep. Prospero Nograles said Meralco should make the refund through stock options instead of deductions from the customers’ electric bills. He said a cash refund would not be viable and would only benefit industrial power users, not ordinary consumers.

"Besides, Meralco would surely find every excuse to avoid paying the refund and that would cause more delays in the repayment process," Nograles said.

Tarlac Rep. Jesli Lapus, who had been in the manufacturing and banking sector for over 25 years, also proposed a stock option formula with a slight twist.

Lapus told The STAR that Meralco could issue to its customers interest-bearing preferred stocks that can be redeemable in the future.

Marikina Rep. Del De Guzman said "equity" would allow the representation of the consumers in Meralco.

Even organized labor is demanding part-ownership of the power firm. Trade Union Congress of the Philippines (TUCP), the country’s largest labor union, said Meralco should refund consumers by way of stocks and effectively make them part owners of the power firm.

"Allowing consumers to be part-owners of Meralco would be an effective formula since consumers will have a voice not only in ownership but also in the operations of the company," TUCP spokesman Alex Aguilar said.

But the militant group Anakpawis strongly objected to the stock-option proposal, saying that the idea of converting the refund to shares of stocks would not change the corporate game in a monopoly firm like Meralco.

Iloilo Rep. Rolex Suplico, Maguindanao Rep. Didagen Dilangalen and Bayan Muna Rep. Crispin Beltran have a more radical proposal, which is to file estafa charges against Meralco.

"A class suit cannot be applied here because this is a criminal case," Suplico told The STAR. "The elements of estafa have been complied with, money was taken by Meralco, and there was an admission of misappropriation of money."

Beltran, for his part, said Meralco could immediately make a cash refund to all its poor consumers who use an average of 200 kilowatt-hours per month. This, he said, would amount to only about P30 million, a paltry sum for the power firm.

Militant consumer group People Opposed to Warrantless Electricity Rates (POWER) also proposed an immediate lump-sum payment to Meralco’s residential customers.

But as an initial step, it is demanding an immediate stop to the collection of P0.167 centavos per kwh overcharge in electricity bills.

"This will result in an instant reduction in power bills, a much-deserved reprieve for consumers who, for nine years, have been robbed by Meralco," POWER convenor engineer Ramon Ramirez said.

Makati City Mayor Jejomar Binay agreed that residential consumers needed a reprieve from the burden of high power costs but appealed that local government units should be included in the discussions on the refund scheme.

"Mayors can speak for their constituents and can commit the resources of their local governments in ensuring the orderly and strict implementation of the refund," he said in a statement.

At least one group has called on the government to take over the management of Meralco, saying that it is the most feasible way to immediately implement the SC ruling.

Ibon Foundation, an independent socio-economic think-tank, said the government should not shirk from its responsibility of insuring that Meralco’s 3.5 million customers are immediately refunded by way of drastic cuts in electricity rates.

The government, which has a 25.8 percent stake in Meralco, had in December ruled out taking over the operations but said it wanted to appoint representatives to help maintain its financial stability. — AFP, Marichu Villanueva, Paolo Romero, Katherine Adraneda, Rommel Bagares, Mayen Jaymalin, Marvin Sy