Legal imposition just because ERC-approved?

A few facts to keep in mind in listening to what the Energy Regulatory Commission (ERC), Meralco and consumers say on the controversial “bill deposit” account.

With ERC approval, Meralco has already amassed P26.4 billion in bill deposits as of December 2011. This is in its Annual Report for 2011. There is money in the bank.

With ERC approval, Meralco reduced interest payments on that P26.4-billion deposit from a possible 10 percent under WACC (Weighted Average Cost of Capital) computation to 0.5 percent. Expressed in pesos and applied to the P26.4-billion deposit, if ERC did not amend the Magna Carta for Residential Electricity Consumers, Meralco would have paid consumers P2.4 billion in interest. Because of the ERC amendment, Meralco will only pay P132 million.

With ERC approval, Meralco will collect from us in RY (regulatory year) 2013 (July 2012-June 2013) around P693.7 million for bad debts. Will this not be enough to cover bad accounts?

With ERC approval, Meralco will also collect in RY 2013 P1.156 billion for “Working Capital.” Meralco asked for 4.5 percent of “OPEX” (operating expense) but ERC granted 7.8 percent, that’s why it’s P1.156 billion. Kawawa naman daw ang Meralco if it’s lower, it cannot cover the high energy cost if it’s only 4.5 percent.

With ERC approval, Meralco collects from us P19.77 billion as “Return on Capital” and another P5.7 billion for “Return of Capital.” We are also charged the P8.9-billion capital expense this year for the equipment Meralco will need to serve us. Mukhang kulang ang P10.3-billion capex last year (Looks like the P10.3-billion capex last year was not enough). Another P6.7 billion will be collected this year for the under-recovery from the second regulatory period, kasi kulang ng P22 billion ang nasingil sa atin ng Meralco during that time (because Meralco’s collection from us during that time fell short by P22 billion).

By the way, Meralco asked for P18 billion. All of these are legal, after all, they’re with ERC approval. Meralco is charging us P1.8 billion more, allegedly for generation under-recovery for 2011, and is asking 8.2-percent interest on that account—or P162 million. In our P26.4-billion bill deposit, the interest Meralco pays is P132 million; on the P1.8-billion generation under-recovery for 2011, the interest Meralco will collect from us is P162 million. But everything is legal and according to the law because they’re approved by ERC.—ROMEO L. JUNIA, philconsumerforum@gmail.com

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Short URL: http://opinion.inquirer.net/?p=38862

Tags: bill deposits , Consumer issues , Electricity , Energy , Meralco , Philippines

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • 9 confirmed dead after ferry sinks off South Korean coast
  • Aquino to public: Learn to sacrifice
  • 20 killed as Islamic extremists rampage in Nigeria
  • Drug firm Novartis to help Leyte firefighter
  • Fears grow for hundreds missing in South Korea ferry capsize
  • Sports

  • Walker leads Bobcats over Bulls in OT, 91-86
  • Man City slips further out of title contention
  • Federer would skip tennis to be with wife, newborn
  • Manny Pacquiao in PBA? If so, he’ll wear No. 17
  • PSC sets Blu Girls US training
  • Lifestyle

  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • This is not just a farm
  • Clams and garlic, softshell crab risotto–not your usual seafood fare for Holy Week
  • Moist, extra-tender blueberry muffins
  • Entertainment

  • American rapper cuts own penis, jumps off building
  • Jay Z to bring Made in America music fest to LA
  • Why Lucky has not bought an engagement ring for Angel
  • Derek more private with new girlfriend
  • ‘Community’ star happy with return of show’s creator
  • Business

  • Fired Yahoo exec gets $58M for 15 months of work
  • PH presses bid to keep rice import controls
  • PSEi continues to gain
  • Number of retrenched workers rose by 42% in ’13
  • PH seen to sustain rise in FDIs
  • Technology

  • DOF: Tagaytay, QC best at handling funds
  • Smart phone apps and sites perfect for the Holy Week
  • Tech company: Change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Syria most dangerous country for journalists, PH 3rd—watchdog
  • Japan says visa-free entry still a plan
  • First Fil-Am elected to Sierra Madre, Calif. city council
  • UC Irvine cultural night to dramatize clash of values in immigrant family
  • Filipino sweets and info served at UC Berkeley Spring Fest
  • Marketplace