Meralco to consumers: Disregard December bills

MANILA, Philippines - The Manila Electric Co. (Meralco), the country’s biggest power distributor, has instructed its 5.3 million customers to temporarily set aside their December 2013 billing statement in deference to the Supreme Court’s 60-day temporary restraining order (TRO) on electricity rate increase.

In a letter to consumers now being disseminated by Meralco, the power firm said consumers should instead pay the amount equivalent to their November 2013 bill.

“In compliance with the TRO issued by the Supreme Court on Dec. 23, we advise you to temporarily set aside your December 2013 bill,” the Meralco letter read.

“We instead advise you to pay the amount equivalent to your November 2013 within 10 calendar days from receipt of this letter,” said Al Panlilio, Meralco senior vice president and head of Customer Retail Services and Corporate Communications, in the letter.

The High Court issued a TRO on Meralco’s record high increase in its December generation charge of P3.44 per kilowatt-hour to P9.10 per kwh.

The generation charge is the cost of power purchased by Meralco for the previous month’s supply. It is the biggest component of electricity cost, accounting for 65 percent.

In effect, the Supreme Court (SC) ordered Meralco to revert to its old generation charge of P5.67 per kwh.

Meralco said consumers have the option to pay the amount indicated in their December 2013 bill, if that amount is lower than their November 2013 bill.

“Should you choose to settle using your November billed amount, please proceed to the Meralco Business Center nearest you. However, if you wish to pay your December 2013 bill in full, you may opt to pay through any Bayad Center outlet,” Panlilio said in the letter.

On the other hand, Meralco said consumers who had already paid their December 2013 electricity bills should just disregard the letter. Meralco said necessary adjustments shall be applied to subsequent billings.

Consumers may call a Meralco customer representative through its 24-hour hotline 16211 for any queries related to their bills, Panlilio also said in the letter.

Meralco’s generation charge rose in December last year because of the one-month maintenance shutdown of the Malampaya gas field, which supplies natural gas to three power plants in Luzon. The power plants had to use the more expensive liquid fuel as a result.

Unplanned shutdown of other power plants also led to tighter electricity supply at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

With the rate hike of over P4 per kwh on hold, Meralco faces roughly P10 billion in payables to energy suppliers, of which P6 billion is due to the Philippine Electricity Market Corp., the operator of the WESM.

Meralco has until Jan. 8 to submit its comments on the TRO.

Larry Fernandez, Meralco head of utility economics, said the company is still drafting its comments.

Blackmail

Power producers are “blackmailing” consumers with warnings of possible blackouts if the SC does not resolve the issue on higher electricity rates soon, party-list group Bayan Muna decried yesterday.

Rep. Neri Colmenares said producers of electricity are “blackmailing consumers into accepting the higher rates” and are jumping the gun on the SC, which is set to hear the petitions of Bayan Muna and other groups against Meralco’s P4.15 per kwh increase.

He said Meralco and its suppliers should respect the 60-day TRO issued by the SC and not do things that would disrupt power supply and cause power interruptions.

He pointed out that with Meralco having decided to respect and comply with the TRO, its power suppliers should do no less.

Colmenares stressed that the government cannot be powerless and helpless if certain unscrupulous power plant owners resort to disruptions to force the public to accept higher electricity rates.

It was upon Bayan Muna’s petition that the SC issued the TRO against the increase in rates in the franchise area of Meralco, the nation’s largest power distributor.

Its franchise covers Metro Manila and neighboring provinces like Laguna, Rizal, Bulacan and Cavite.

The distributor said its adjustment was largely prompted by increased procurement cost in the WESM in November, when the Malampaya natural gas facility underwent annual maintenance and when several major power plants went on unscheduled shutdowns.

The simultaneous closure of the plants forced electricity prices up. Meralco procured 11.5 percent of its supply from WESM at P33.22 per kwh, nearly three times the prevailing rate before the shutdowns.

The unplanned closures gave rise to suspicions of collusion among certain power producers. The Department of Energy and the Energy Regulatory Commission (ERC) are supposed to be investigating such possible collusion.

Bayan Muna invoked the consumers’ right to due process in its SC petition. The ERC approved Meralco’s rate increase without conducting public hearings.

Certain power producers have warned the government and consumers that they might be forced to scale down capacity or shut down their plants if they do not get paid for electricity supplied to Meralco.