SENATE deputy minority leader Risa Hontiveros yesterday said she will object to the renewal of the franchise of the Manila Electric Company (Meralco) unless it commits to refund the more than P150.8 billion it has been overcharging its customers since 2012.
“Kung walang maging commitment sa pagwasto sa nakaraang charging practices, parang ang hirap naman isipin na magkaroon ng bagong prangkisa, di ba? Ang pagkakamali at pagkukulang ay dapat iwinawasto, hindi po yan dapat nire-reward (If there is no commitment to correct past charging practices, it’s hard to think that it will have a new franchise. Mistakes or shortcoming should be corrected, not rewarded),” Hontiveros said during the “Kapihan sa Senado” media forum.
She said previous Senate hearings and interpellations on the proposed Meralco franchise bill have shown that the distribution firm erred in computing the fees that it has been charging its customers.
According to Hontiveros, Meralco used the nominal weighted average cost of capital (WACC) instead of the real WACC, which was the recommendation of a consultant of the Energy Regulatory Commission (ERC) consultant.
If the consultant’s recommendation was used by Meralco, the senator said this would have resulted in lower electricity charges.
She said the nominal WACC determines the company’s rate of return, adding that the higher WACC means that “consumers are paying so much more than what is needed for Meralco’s viability, while Meralco gets bigger and bigger windfall profits.”
“So, dapat pala, kung nabigyang daan yung mas mababang WACC na rekomendado ng consultant ng ERC noon, bumaba sana yung bill na buwan-buwan ng customer ng Meralco (So, if the recommendation of the ERC consultant was followed, the monthly electricity bills of Meralco’s customers would have gone down),” Hontiveros said.
Also during the past hearings, Hontiveros senators found out that Meralco overstated its regulatory base asset or RAB, which is the sum total of all its assets, including equipment and infrastructures, “to justify” imposing higher electricity rates.
She said the power company had also charged its customers for the cost of inflation, not once, but twice, since 2012.
“Bagama’t nangako sila na hindi na, simula susund na buwan ng Pebrero, hindi na magpapatuloy ang ganitong practice, pero inamin nila na ginagawa pa nila ito sa nakaraang mga taon (Although Meralco promised to discontinue it starting next month, but it admitted doing it in the past years),” she said.
Meralco said it has refunded some P40.5 billion to its customers starting 2021, and has also scheduled the refund of P7.7 billion.
But Hontiveros said a study conducted by industry experts show that Meralco has an estimated P150.8 billion in overcollection.
She lamented that Meralco has yet to commit to refund its customers the P150.8 billion overcollection.
She added she will file a resolution urging the Senate to conduct an investigation on Meralco’s overcollections “so that a full, fair, and transparent accounting for the benefit of our consumers may be made.”
Senate Bill No. 2824, or the proposed Meralco franchise bill, is still pending on second reading and is still in the period of interpellations.
The House of Representatives approved the Meralco franchise bill on November last year, giving the company another 25 years to operate.
Meralco’s existing franchise will expire on 2028.
