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ERC metes P19-M token fine versus Meralco

Due to its own confusing “estimated billings” and with the regulatory compass swinging in all directions during the enhanced community quarantine (ECQ) period, the Energy Regulatory Commission (ERC) meted “token penalty” of P19 million against Manila Electric Company (Meralco) for alleged non-compliance of its orders.

On top of the fines it imposed, the ERC likewise ordered Meralco to extend retail rate discount of more than P200 million to lifeline or the so-called marginalized or poor consumers — primarily those whose usage had not exceeded 100 kilowatt hours (kWh) for one month billing cycle – and such shall be effective in the next billing cycle.

This entails setting to zero the distribution, supply and metering (DSM) charges of these lifeline end-users – and such discount to poor consumers had been based on the earlier request of Congress as sounded off by House Speaker Alan Cayetano. Since this is a discount, it will effectively be a reduction in the bill of the lifeline users.

“The said retail rate discount will provide temporary economic relief to more than two million lifeline consumers and their family members at least for a month…the total discount to be provided to all lifeline consumers is estimated to be around P200 million plus,” the Commission has stipulated.

On the alleged Meralco violations, it was the ERC itself that directed and had issued the relatively delayed guidelines for DUs to opt for “estimated billings” during the government-enforced lockdown in Luzon around March to May, but for political expediency, the regulatory body decided to toss the blame on the power utilities; and such instigated its move to enforce penalty versus the biggest industry player.

In a decision dated August 20 this year, the ERC stated that it imposed P19 million fine on Meralco “for violating the regulatory agency’s advisories that it issued during the community quarantine period starting in March until July 2020.”

The regulatory body emphasized the violations of the power firm had been on: first, its failure to clearly indicate that the bills were estimated; and second, on its failure to comply with the mandated installment payment arrangement.

The regulatory body expounded “the basic penalty of P100,000.00 is multiplied by the number of infractions committed by Meralco which resulted in a total administrative fine of P19 million.”

The ERC said it factored in  “the number of advisories that were violated by Meralco and the number of days that lapsed before serious efforts were undertaken to comply with the Commission’s directives.” And the reckoning date for that had been July 9 this year.

The mandate of the ERC on the installment payments just came belatedly in May though – and that ensued confusion to most DUs and even electric cooperatives, which at that time already dispatched their bills because the regulator’s order was issued after their billing cycle cut-offs – which in effect was actually a showcase of the ERC’s weakness and inefficiency in carrying out its functions especially during crisis situations.

Even for Meralco, it wasn’t even clear from the start at what spread its amortized payments shall be carried out. Later on in May, it was announced by the ERC in a Congressional hearing that for consumers in the 200 kilowatt hours and below, the installment shall be for six months; and those with usage from 201 kWh and up, the amortization of payments shall be over four-month stretch.

ERC Chairperson Agnes T. Devanadera averred “Meralco’s neglect to provide accurate and timely information especially during this time of pandemic has created chaos and confusion to most of the electricity consuming public.”

She noted the regulatory body issued the series of advisories from March to May, “with the intention of alleviating the financial burden of the electricity consumers who were mostly adversely affected by the community quarantine measures implemented by the government.”

Devanadera asserted “this serious neglect by Meralco resulted in a multitude of complaints by its consumers to this Commission.” The ERC previously indicated that it received more than 50,000 complaints from end-users served by the power utility giant.

Atty Jose Ronald Valles, head of regulatory management of Meralco, said “we will study the order and we will file the appropriate pleading after consultation with our lawyers.”


Source: Manila Bulletin (https://mb.com.ph/2020/08/27/erc-metes-p19-m-token-fine-versus-meralco/?utm_source=rss&utm_medium=rss&utm_campaign=erc-metes-p19-m-token-fine-versus-meralco)

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