Meralco wins rate hike case amounting to P22.64 billion

·3 min read
Pedestrians walk before a Manila Electric Co. (MERALCO) Office in Manila on October 1, 2013.  (Photo: JAY DIRECTO/AFP via Getty Images)
Pedestrians walk before a Manila Electric Co. (MERALCO) Office in Manila on October 1, 2013. (Photo: JAY DIRECTO/AFP via Getty Images)

Amid skyrocketing fuel and basic commodities prices, the Supreme Court (SC), in a 6-5 vote, has upheld the December 2013 rate hike by the Manila Electric Company (Meralco) implementing a staggered power rate hike amounting to P22.64 billion.

The rate hike comes eight years after it was supposed to be implemented in November 2013.

In its decision released Monday (July 4), the high court denied the petitions filed by Bayan Muna and the National Association of Electricity Consumers for Reforms, which argued there is a lack of due process in the Energy Regulatory Commission’s (ERC) approval of the power rates increase.

Responding to the SC ruling, former Bayan Muna Representative Carlos Zarate, one of the petitioners, said that the “highest power rate hike in history could not have come at a worse time.”

“A financial burden like this, once Meralco imposes this new power rate hike – on top of the already high electricity rates – may already break the Filipino consumers’ back,” said Zarate.

In 2013, the ERC approved a staggered increase of P7.67 per kilowatt hour (kWh) for the December 2013 billing of Meralco consumers and ordered an additional P1.00/kWh increase in the February 2014 billing.

According to Justice Amy Lazaro Javier’s dissenting opinion, additional charges could have gone up to an additional P800 on the bill, a 61% or P4.15 per kWh increase.

The rate hike was never implemented after the SC issued an indefinite temporary restraining order (TRO) on April 22, 2014.

Meralco requested the billion-peso power rate hike after the shutdown of the Shell Philippines Exploration B.V. Malampaya operations in 2013, allegedly compelling the company to buy more expensive electricity from the Wholesale Electricity Spot Market (WESM).

The power utility firm wanted to recover around P22.64 billion worth of generation costs from its consumers.

In the decision penned by Associate Justice Jhosep Lopez, the SC said the ERC’s approval of the staggered power rate hike was “within the confines of its regulatory powers and cannot therefore be said to have acted with grave abuse of discretion.”

Meanwhile, one of the dissenters, Associate Justice Marvic Leonen said the ERC should have done a thorough investigation of Meralco computation.

“It should have initiated investigations even prior to the Joint Congressional Committee. The mention of such high increase by Meralco should have triggered the Energy Regulatory Commission to make relevant inquiries to protect the public,” Leonen said.

"The sheer speed at which the Energy Regulatory Commission moved in favor of Meralco's plea demonstrates an abject inability to act in keeping with its mandate, the imperative of public interest, and the vast competencies vested in it,” he added.

MERALCO is yet to comment on the SC verdict. In a statement, the company said it has yet to receive a copy of the court decision.

“We have yet to receive the official copy of the decision. Once we receive it though, we will need to study the reported SC decision to understand and see what the actual impact will be,” a Meralco representative said.

Pola Rubio is a news writer and photojournalist covering Philippine politics and events. She regularly follows worldwide and local happenings. She advocates for animal welfare and press freedom. Follow her twitter @polarubyo for regular news and cat postings.

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