ERC officials told to resign after Meralco gaffe

February 3, 2006 at 2:33 am 1 comment

Written by Tetch Torres,

Officials of the Energy Regulatory Commission (ERC) should resign after the Supreme Court nullified an ERC order allowing Manila Electric Power Co. (Meralco) to increase its power generation rates, militant leaders said Friday.

“Maybe Chairman [Rodolfo] Albano, et al should consider seeking employment elsewhere since they do not appear to be effective regulators. They have been overruled so many times by the courts, there must be something wrong with their methods,” Bayan Secretary-General Renato Reyes said.

“The ERC has been accused of exercising so many times grave abuse of discretion. That is not a very good hallmark for a regulatory body,” said Engineer Ramon Ramirez, convenor of the People Opposed to Warrantless Electricity Rates (POWER).

The two militant leaders added that Meralco should also refund part of their 2004 collection.

“Now that the Supreme Court has ruled on the increase, it is only logical that a refund be in order in the same amount that was collected during the implementation of the automatic recovery scheme. The refund will provide a small measure of relief in these times of rising prices due to the VAT [value added tax] hike,” said Ramirez.

Reyes said there should be a long-term effort made in addressing periodic rate increases due to the automatic recovery schemes.

“The Supreme Court decision shows us the flaws of an automatic recovery scheme like the Generation Rate Adjustment Mechanism (GRAM) because it does not inform the public of the forthcoming increases,” Reyes said.

“It is for this reason that the Energy Regulatory Commission should stop the implementation of the GRAM and other automatic recovery schemes,” Reyes said.

“Automatic recoveries are oppressive mechanisms because they do not allow consumers to study the increases and contest these increases in the proper venues,” he said.

“We are therefore made hostages by the ERC and distribution utilities. The fact that the ERC raised the issue of publication of the increase and notification of consumers is already a point against automatic recovery mechanisms,” Reyes said.


Entry filed under: News Item. Tags: , , , .

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1 Comment Add your own

  • 1. BoyDL  |  November 27, 2007 at 7:49 am

    Was this the same ERC Chair who was inclined to grant Transco [or NPC?] a rate increase to recover costs of repair on power lines and facilities which were being downed by storms and floods almost annually? If i recall the news right, he was accepting the justification that the applicant’s insurer, GSIS, would not include Force Majeure risks in their insurance policy.

    There is some measure of certainty that storms and floods would occur annually in varying severity. and good management practice, aside from fiduciary responsibilty, obligates the management to protect their assets against anticipated risks.

    If there is a law that prevents public companies from obtaining insurance cover from others even when GSIS could not, that law needs to be changed.

    In any case, what finally happened to that application for rate increase?


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