ERC denies proposing scheme to offset Meralco refund

The Energy Regulatory Commission (ERC) has denied recommending to Manila Electric Co. a system of offsetting the cost of the firm’s refund to customers.

"I did not suggest an offsetting (scheme)," ERC Chairman Rodolfo Albano said. "I think it was Meralco that suggested that."

Albano said the law states that utility companies may recover their losses from power generation costs only through the generation rate adjustment mechanism or GRAM.

The scheme requires utilities like Meralco to file a petition with the ERC for the recovery of generation costs. Albano said the Lopez-run company has not yet filed such petition.

The Supreme Court in August ordered Meralco to refund consumers.

The SC made the order after declaring null and void an ERC- approved power rate increase in June to August 2004, saying it was applied without the benefit of public hearings. The cost of the refund is estimated at P827 million.

Meralco spokesman Elpi Cuna clarified that what he meant by offsetting was deducting the cost of refund from the customer’s bills.

"That is what I meant by offsetting. Some of the amounts may be too small to make it worth the customer’s time and effort to collect from our offices," Cuna said.

Albano meanwhile lambasted Socio-Economic Planning Secretary Romulo Neri for accusing ERC of being "one of the government agencies that coddle the industries they regulate."

"The ERC is strictly implementing the EPIRA. Be it known that the mission of the ERC is to promote and protect the long-term interests of consumers in terms of quality, reliability and reasonable pricing of a sustainable supply of electricity," Albano said.

"The ERC remains true to its commitment and has never been remiss in the performance of its duties," Albano stressed.

Neri said ERC, like other regulatory offices, tends to be easily swayed by influential companies that are supposedly under its regulatory powers.

"Mr. Neri’s allegations are based on hearsay. There are no facts and evidence supporting his claims," Albano said.

"Casual statements like these may cause mistrust by the people on the ERC. It could lead to restiveness and worse, the failure of the reform agenda contained in the Electric Power Industry Reform Act," he added.