Meralco refutes overcharging claims

MANILA, Philippines — The Manila Electric Co. (Meralco) has refuted allegations by a lawmaker that the company overcharged its customers starting in 2012, calling such claims baseless and unfounded, while also defending its ongoing power supply procurement from malicious accusations.

In a statement, Meralco first vice president and regulatory management head Jose Ronald Valles said the distribution utility’s rates undergo a review and confirmation process to ensure that these are fair and reasonable.

Valles said the company has no power to unilaterally set its own rates, noting that all rates reflected in the electricity bills of customers are approved by the regulator following a stringent and transparent process of public hearings.

“I would like to reiterate that as a highly regulated entity, Meralco strictly adheres to the rules governing its operations and franchise, and the rates we implement always have prior approval from the regulator. A testament to the strict review, these rates are still subject to periodic confirmation process by the Energy Regulatory Commission (ERC),” he said.

Santa Rosa City Rep. Dan Fernandez has claimed that since 2012, Meralco has overcharged its customers.

Meralco described as “unfortunate” the lawmaker’s focus on the company, noting that records would show that it is the only private distribution utility that has made a distribution refund in compliance with ERC directive.

“The proper venue for discussing the refund claims is the ERC, which has the rate-setting power, and the regulator has already decided on a refund totaling P48 billion, which Meralco implemented in a timely manner,” Valles said.

On allegations that Meralco has an “extremely high weighted average cost of capital,” Meralco said the setting of the weighted average cost of capital (WACC) is a function of the regulator.

The company said its last approved WACC is the lowest allowed by the ERC under the performance-based regulation, whether for the National Grid Corp. of the Philippines or for a private distribution utility.

According to Meralco, the WACC was determined based on a set of rules that underwent public consultation and thorough review by the ERC.

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