Meralco asking ‘recovery’ of subsidies paid by consumers and taxed by gov’t

/ 12:12 AM October 13, 2015

REGARDING GODOFREDO Peteza’s letter (“‘Muchas gracias’ Inquirer, Macalintal, ERC,” Opinion, 10/2/15) thanking all those who helped him get the elusive 5-percent discount on his water and power consumption, may I suggest that he also add the “Subsidizing End-Users” as defined/described in Section 3 of ERC (Energy Regulatory Commission) Resolution No. 23 of Dec. 15, 2010, the rules for implementing the discount to qualified senior citizen end-users and the subsidy from the subsidizing end-users. It is the subsidizing end-users—that’s us—who are the ones actually paying or subsidizing Peteza’s consumption. So I suppose we, too, may take a bow with the Inquirer, lawyer Romulo Macalintal and the ERC chair and CEO.

ERC rules say: “Subsidizing End-User shall refer to the non-senior citizen and non-qualified senior citizen end-users who shall bear the discounts and adjustments extended to qualified senior citizen end-users.” This is computed and collected monthly. A Meralco household that consumed 253 kWh was billed P21.56 for this subsidy, which must have included the “Lifeline Subsidy” for households consuming less than 100 kWh per month and which we, the subsidizing end-users, also pay for. This is shown in the “Breakdown of Charges” in the monthly bill.


The government gives discounts and subsidies but consumers bear the cost; government plays benevolent big brother but we pay the bill. Worst, after shifting the burden to us, government taxes us for this involuntary subsidy. The Meralco household referred to earlier was charged P4.33 for the 12-percent VAT on “Subsidies,” as shown in the billing details. In fact, electricity is overtaxed so that even the loss—“System Loss”—is taxed. It was P10.22; total taxes for this account was P212.95

I have no problem with the senior discounts and the other amenities/courtesies, per se, and as a senior of almost nine-year standing, I can personally attest to the convenience and the financial relief that come with antiquity. But credit should go where it should, and we should be honest enough to declare, up-front, who is paying for this senior discount.


Incidentally, Meralco has a pending application with the ERC (Case No. 2014-050CF) for the recovery, i.e., collection of over/under recovery of various charges like transmission, generation, system loss, lifeline subsidy, and senior discount subsidy, with “carrying charge” based on the 91-day T-Bill. It’s a rather complicated filing, but when one centavo per kWh adds up to P330 million, and 10 centavos to P3.33 billion from sales of 33 billion kWh, even the most complicated is worth doing.

The regulatory house of our power and electricity industry is broken. From its lopsided rules to the ill-concealed biases, that house needs a good fix. We hope and we wait.

—BUTCH JUNIA, [email protected]

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TAGS: Energy, letter, Meralco, opinion, Power, subsidy
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