MIRIAM ASKS ERC TO REDUCE POWER RATES

Sen. Miriam Defensor Santiago, chair of the Joint Congressional Power Commission (Powercom) issued instructions to ERC chair Rodolfo Albano to take immediate steps to reduce Meralco rates.

Santiago said that although Powercom has no power to issue orders to ERC, the EPIRA law gives Powercom the function of issuing guidelines to ERC, and to monitor and ensure implementation of the EPIRA, which was intended to lower power rates.

In a privilege speech yesterday, Santiago issued the following guidelines to ERC:

• Resolve within three months, all pending petitions already submitted for resolution, with the end in view of lowering immediately the Meralco power rates;
  
• Uphold consumer protection in resolving the present petition from Meralco and Napocor, requesting permission to pass on to the consumers some P14 billion of the Meralco debt;
  
• Announce immediately a cap on systems losses, lower than the existing 9.5 percent cap;
  
• Order Meralco to list all inclusions in their generation cost;
  
• Order Meralco to show cause why it should not immediately give refunds to its consumers, pursuant to the Supreme Court decisions in cases concerning Meralco income taxation which were apparently passed on to consumers; and
  
• Order Meralco to show cause why it should not immediately give refunds for deposits on billing meters.

In the same privilege speech, Santiago said that the internet website of ABS-CBN, owned by the Lopez group, has committed against her the crimes of blackmail or grave threats, as well as the crime of libel, intended to defeat her candidacy for the International Court of Justice.

Santiago said that the website is guilty of following a scheme or pattern, because a series of derogatory articles against her and Powercom appeared immediately in the website after she chaired a Powercom public hearing to investigate why Meralco power rates are so high, the second highest in Asia.

Santiago chaired the meeting on May 12; the alleged defamatory articles appeared on May 16, 21, 23, and 25.

-End-

Transcript of Senator Miriam Defensor Santiago ’s interview

After the Powercom hearing on Meralco’s high electricity rates

Ang Joint Congressional Power Commission or Powercom na may kapangyarihan sa power industry ay at least nagbigay ng dalawang resulta na makatulong para bumaba ang presyo ng kuryente. Una, inutusan namin ang Energy Regulation Commission, ang tagabantay ng Meralco, Transco, at NAPOCOR na hindi dapat payagan ng ERC ang petisyon ng Meralco.

May kasunduan sila na dahil may utang ang Meralco sa NPC at ang NPC naman ay may utang sa Meralco, hindi nalang nila itutuloy ang paghahabol ng utang nila sa isa’t isa kung ‘di ipasa nalang nila sa mga customers. Ang ginawa natin ngayon ay inutusan ang ERC na huwag payagan ang petisyon na iyon dahil nag-utangan sila sa negosyo nila. Walang papel ang taong bayan doon, hindi naman tayo kinonsulta sa mga utang na iyon. Kailangan sundin ang prinsipyo na kung hindi nakisali ang consumer sa desisyon ng management, hindi sila dapat singilin.

That’s called the “just and reasonable principle”. Under that principle, we have ordered the ERC to dismiss the petition of Meralco supported by the NPC to pass on the costs of their mutual debts to the consumer. We do not even know the exact amount, but definitely it will run perhaps to billions.

Pangalawa, nakuha natin kanina na utusan ang ERC na lagyan ng limit ang systems losses na kalakip doon sa billing ng Meralco. Bawat buwan, nakalakip doon sa binabayad natin sa kuryente ang tinatawag natin na systems losses. Ngayon sa ilalim ng batas, dapat may limit yan kung magkanong systems loss ang pwedeng ipasa ng Meralco sa customer. Hanggang ngayon, hindi nila linalagyan ng limit, kaya inutusan natin kanina ang ERC na lagyan ng limit ang systems loss na yun para lumiit din ang pagsingil sa ating consumers.

Who is to blame for the high electricity prices?

Hindi mo masasabi dahil ang aming mga conclusion ay manggagaling sa mga dokumento na hiningi naming ibigay sa komisyon galing sa iba’t ibang mga pinuno ng mga ahensya na may kinalaman sa paghatid ng kuryente. Pero sa ngayon nakikita ko na mayroon talagang mali na ginagawa ang Meralco. Halimbawa, inaamin ng presidente ng Meralco kanina na ang binibili nilang mga metro sa kuryente ay naggagaling din sa kumpanya na ari din ng Meralco at inaamin nila yung ibang systems losses nila ay hindi kasalanan ng mga gumagamit kundi hindi basta dahil teknikal o due to pilferage kaya ang Meralco ang may kasalanan.

Hindi lamang iyon, pati ang Napocor ay may kasalanan din. Mayroon din silang management abuses. At dapat, ang tagabantay o regulator nila na ang ERC ay kahati din dun sa pagtaas ng presyo dahil hindi sapat ang bagsik ng ERC na bantayan at suriin nya ng mabuting mabuti itong pinagpapatong sa ating electric bill kaya hindi mo masasabi talga na iisa lang sa kanila ang may kasalanan. Pare-pareho silang may sala talaga at banding huli, mangangailangan yan ng pagamyenda ng ating batas ngayon na tinatawag na EPIRA law.

How soon will we see the results?

I hope the results will reflect, more or less, 30 days after the 15 days compliance I gave the ERC.

How about Mr. Garcia's proposal to change Meralco's management?

Ewan ko lang kung pwedeng magawa iyon dahil napaka kumplikado nito, sari-saring mga scientific factors ang involve jan. Kaya ang gagawin natin ay hihingi tayo ng tulong ng isang grupo ng mga UP professors na sa ngayon ay nag-aaral kung paano ibaba yung presyo ng kuryente.
How about the proposal to bring down the VAT?

Imposible yun, dahil wala na ngang pera ang gubyerno tapos lahat ng buwis na napatong dun ay gusto nilang tanggalin, e di lahat nalang ng sector ng ekonomiya hihingi ng ganyang pagalis ng VAT.

On Garcia’s proposal to divide the franchise ng Meralco

There’s no problem with that, we already have a model. What used to be the MWSS was divided into two and it did not result into higher water rates. It, in fact made a lot of money for one franchise holder although the other franchise holder did not make much money. Anyway, it resulted in better water supply. So, we in the Commission have no objection if that is his proposal. Ang question lang dun, ay sabi nila ay hindi nila gusto na ang GSIS ay magpapatakbo kung di sila ang maghahanap ng mas magaling na magpapatakbo. Ewan ko lang kung magagawa yan dahil marami kasing pasikut-sikot jan. Sino ang ilalagay mo dyan ay dapat alam niya lahat ng mga relations diyan ng Meralco at ng mga subsidiary companies and all will depend on the price of electricity by that time. Pero kung management efficiency lang ang paguusapan, mukhang may napatunayan kanina sa pagtatanong ng mga senador at mga kongresista na talagang may management inefficiency. Ibig sabihin ay hindi napaaketo ang batas na sabi ay dapat bigyan ng kuryente ang mamamayan sa least cost manner.

Is there a syndicate here?

Una, ang pag-amin ng Meralco na bumibili siya ng sarili niyang mga metro sa sarili nyang kompanya, at least in part. May mga satellite companies ang Meralco kaya nakikinegosyo sya sa sarili niya. You should keep your private business interest at arm’s length from the public interest.

Is Meralco to blame for  the systems loss?

Partly may kasalanan ang ERC, kasi dati may limitasyon yan e, I think it was 9.5 percent tapos na-abolish ang limit na yun and the power was given to the ERC to set the new limits depending on all those factors that I read off, pero hanggang ngayon hindi sila nagseset ng limits kaya parang libre ang Meralco na gumawa ng kanilang limits. Sasabihin nila na pareho ang lahat ng ito at pinayagan ito ng ERC kaya yun naman ang base ko na magsabi na lax ang ERC. Sana kung mas mahigpit sila sa pag implement ng EPIRA, hindi sana tumaas ng ganun ang singil sa kuryente. Hindi ibig sabihin na dahil na-approve na ng ERC e legal na. Maaring may kasalanan din ang ERC at pati sya maparusahan.

Theoretical studies by technical scholars can find out if there has been a violation of the “just and reasonable principle” or violation of the least cost principle. They could be charged criminally under the penal code for combination in restraint of trade kung ang resulta ay tumaas ang binabayaran ng mamamayan o kaya hindi maganda ang resulta sa ekonomiya pwede na siyang violation of combination in restraint of trade. Parang anti-trust law and anti-monopoly law.

Transcript of Senator Miriam Defensor Santiago ’s interview

On Malacanang’s move to lower electricity rates by taking over Meralco

Remember that the Supreme Court has already ruled that Meralco has overbilled its costumers. It is incumbent of the government to make sure that overbilling does not recur. Otherwise, we would be exercising a futile protest over post facto actions that are prejudicial to the consumer.

As chair of the Powercom, I can summon the chair of the ERC only after he has acted on the matter. We in Congress could not dictate how the ERC, which is an executive agency, should act on the matter.

Our position is this: the EPIRA law, for which the Powercom was established, clearly states as its mandate the lowering of electricity prices in the Philippines , which is one of the highest in Asia . Therefore, if state control of Meralco will result in lower electric costs, the Congress is bound by law to support that move.

In fact, I think Meralco issued a statement today that it will not hinder these moves, and will in fact support them. So it is just a question of methodology, there is no lowering electric prices because both sides appear to agree on that.

The methodology however is tricky. There are technical terms that need to be translated to the public to explain them in detail.

Normally, under the capitalist philosophy, the least participation of government if private business the better. But because the state has expressed official concern over the electric power industry by passing the EPIRA law, we shall allow matters with respect to electricity rates to be decided by the private sector based on good corporate management practices. But if the result for the consumer is significantly higher rates, then we just have to step in.