Limits

In an attempt to diffuse the brewing tension over Meralco's passing its system losses to customers, it launched a publicity campaign starring Judy Ann Santos which tried to justify this policy. Curiously, the ad was paid for--if I'm not mistaken-- by First Gen, a Lopez-owned holding company that owns the IPPs that Meralco gets a substantial, more expensive generated power from.

Unfortunately, the ad won't erase the fact that system losses reflect Meralco's operational inefficiencies and not the consumers'. The consumers should not be penalized for something that they have nothing to do with.

Previously when the controversial PPA (Power Purchase Adjustment) was still in force, system loss charges along with franchise taxes and the adjustments attributed to the take-or-pay provisions entered into with Independent Power Producers or IPPs, were all bundled and forced down the throats of consumers. Bundling effectively allowed Meralco to pass on system losses to its costumers discreetly. With the GRAM (Generation Rate Adjustment Mechanism) replacing the PPA, system loss charges are not included anymore, and so Meralco was forced to state it separately in the electric bill. Thus, it has only been recently that this unfair policy has come to the attention of consumers.

The computation of the allowable RORB (rate on return base) remains a bone of contention. Meralco claims that including income taxes (and perhaps, even employee pensions) as part of the operating costs that have to recovered is a standard practice among utility firms around the world. I totally disagree. The company should shoulder the tax payments. It is part of THEIR cost of doing business, NOT the consumers. No wonder that the country has the second most expensive power rates in Asia.

The ERC should act in behalf of the consumers, and not on the behest of the Lopezes. It seems that the monopolistic behaviour of Meralco is testing everybody's limits.