House leaders rap power distribution firm for seeking ‘unjustified’ rate hike Created on January 27, 2014, 9:45 am Posted by nup

Speaker Feliciano Belmonte Jr. and  Dasmarinas City Representative Elpidio Barzaga Jr. have questioned the plan of the Manila Electric Company (Meralco) to hike electricity rates even as they denounced the power distribution firm’s lack of foresight and transparency in seeking the “unjustified” increase.

Belmonte and Barzaga pointed out that Meralco knew  of the scheduled Malampaya natural gas plant shutdown, which was its reason for buying more expensive power from the spot market, yet did not take steps to prevent this costly situation.

The Speaker  said the P4.15 per kilowatt-hour power rate increase, which was approved by the Energy Regulatory Commission (ERC) late last year,  should be blamed on Meralco and the other power producers who simultaneously shut down while Malampaya was undergoing maintenance repair.

In its application for a rate adjustment, Meralco told the ERC that it had to increase its rates because it was forced to buy costlier power from the West Electricity Spot Market (WESM) when the Malampaya and other plants shut down for periodic maintenance repairs.

“Why do these power plants have to schedule their maintenance all at the same time and coinciding with the Malampaya when they could have done it on a staggered basis?” Belmonte said.  “As for Meralco, there were scheduled outages. They could have devised a plan to address the situation in advance. But they didn’t do it. Why the lack of concern?” added Belmonte, who is also the honorary chairperson of the National Unity Party (NUP).

Barzaga, who is the NUP’s vice president for external affairs, said Meralco should not have been allowed to hike electricity prices by P4.15 per kwh, the highest increase in Philippine history, considering  that it had failed to justify the rate adjustment.

“Meralco has not shown the specific data representing the alleged increase in its generation cost on account of the shutdown of the Malampaya plant and other power plants to the House and the Senate which have been conducting inquiries on this,” Barzaga said.

“In the spirit of transparency and accountability, Meralco should present documents that states the actual increase in its generation cost specifying the kilowatts purchased, the amount and the power producing plants in order to justify the P22 billion,  which it seeks to recover from its 3.5 million customers,” he added.

Belmonte noted that Meralco could have mitigated the impact of the Malampaya plant shutdown by asking power plants to take turns in scheduling outages.

“Where is their [Meralco] foresight? They could have alleviated the situation, ask the power plants to take turns in scheduling outage. But Meralco announced their rate hike even before they asked the approval of the ERC as if the approval of the ERC is a long foregone conclusion,” Belmonte said. 

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