In the Senate hearing yesterday, MERALCO representatives admitted that system losses due to pilferage as well as the company's own electric consumption are being passed on to consumers, on top of the debt it owes NAPOCOR for failing to honor its purchase contracts.
The onerous cross-ownership provision allowed in the EPIRA-- allowing for a distribution company to partly-own a generation company, or IPPs-- defeats the purpose of introducing competition into the industry.
In full-page ads, obviously MERALCO wants to put the entire blame on NAPOCOR for the series of price hikes in electricity. But clearly, questionable pass-on charges imposed by MERALCO to its costumers due to system losses and debt owed to NAPOCOR, as well as purchasing power from MERALCO's sister companies at higher rates are part of the problem.
The government is splitting NAPOCOR and engaging in privatization activities to make the generation sector competitive and efficient. The same should be true for the distribution sector. It's about time the government do something about the abusive behavior of this distribution utility.
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