Higher power rates in August

Posted at 03/03/2014 7:49 AM

MANILA, Philippines - Power rates will go up by at least 3.8 centavos per kilowatt-hour starting August, this time owing to an increase in the rates of the National Power Corp.

Napocor originally planned to implement the higher universal charge for missionary electrification (UCME) last February but opted to defer this for six months or until July as the Supreme Court (SC) deliberates on the rate hike dispute over the Manila Electric Co. (Meralco)’s December 2013 bill of P9.10 per kwh.

Effective August, Napocor will increase its UCME by P0.038 per kwh, raising the UCME to P0.15 from the prevailing rate of P0.1163 per kwh. This will be charged to power consumers.

Approved by the Energy Regulatory Commission (ERC), the UCME is a line item in consumers’ electricity bills, which is used to subsidize the cost of providing power to remote areas in the country that are not connected to the main grid.

In a resolution dated Feb. 4, Napocor said it moved to delay the implementation of higher universal charge to August to help ease the burden of consumers who are facing possible power rate hike from Meralco.

The state-owned power generation company deferred the higher charges upon the recommendation of Energy Secretary Carlos Jericho Petilla.

“There is a need to alleviate the burden (of consumers) from any increase in electricity rates pending the review of policies in the electricity industry,” Napocor said.

However, it said it could only defer the rate hike until July this year.

“Napocor has taken the initiative of reviewing its financial condition and has determined that it can support the budgetary requirements and ensure viability of its operations in the Napocor-Small Power Utilities Group areas for a maximum period of six months if it defers the implementation of UCME recoveries,” Napocor said in its resolution.

The ERC approved the deferment in a separate order.

“The collection of higher UCME will start in August,” the ERC said.

Napocor’s deferment came amid an ongoing power rate hike dispute covering Meralco’s December 2013 bill of P9.10 per kwh, which is still the subject of a 60-day temporary restraining order issued by the SC.

The high court has yet to decide on the issue.

P1.5-B refunds

Meanwhile, Meralco still owes its 5.2 million customers around P1.5 billion in refunds more than a decade after the SC ordered the company to return previous overcharges, a leader of the House minority bloc said yesterday.

“The problem with Meralco is that while it has been quick to distribute profits to shareholders by way of hefty cash dividends, and swift to jack up rates to the detriment of customers, the company tends to dawdle when it comes to repaying consumers,” Deputy Minority Leader Arnel Ty said.

He urged the House committee on energy to inquire into Meralco’s failure to fully comply with the Nov. 15, 2003 SC ruling for the company to give back to its customers some P30.2 billion in overcharges.

He said the overcharges stemmed from prior years’ corporate income taxes, which were wrongfully charged by Meralco to its customers.

“We were told that up to now, or more than 10 years later, Meralco has yet to refund at least P1.5 billion to approximately 260,000 customers,” Ty said.

The lawmaker said the distributor has the means to settle the refunds, since it has been raking in billions in annual net profits.

He said the refunds should include interest.

Ty pointed out that Republic Act 7394 or The Consumer Protection Act mandates the state “to protect the interest of consumers, promote their general welfare, and to establish the standards of conduct for business and industry.”

A Meralco spokesman said they still have up to next year to complete the refunds.

Earlier, Ty urged Meralco to partially pay its power suppliers for electricity supplied in November and December, while it is awaiting SC resolution of the case involving its P4.15 per kwh rate increase.

The distributor’s suppliers have warned the public and the high court that unless they were paid, they might not be able to operate at full capacity since they needed money to buy fuel.

The SC has ended its hearings on oral arguments of the petitioners led by party-list group Bayan Muna, Meralco and the ERC.

It has also extended the 60-day temporary restraining order on Meralco’s rate increase. – With Jess Diaz