Columnist reminded of SC 2003 ruling on Meralco refund

The Jan. 16 editorial, “Power dilemma,” presents two likely scenarios when the Supreme Court rules on the consolidated petitions against the Energy Regulatory Commission (ERC), Meralco and the power producers. It succinctly explains that should the Supreme Court decide in favor of the petitioners/consumers, it can mean “uncertain economic conditions, diminished profitability, and high possibility of rotating power outages.” On the other hand, should the Supreme Court decide in favor of the ERC, Meralco and the power producers, it can also mean one thing, continuous power rate increases.

The constitutionality of the passed-on-additional generation cost  through  automatic increases is of prime importance such that its resolution will also define clearly what public interest means in light of the reforms introduced in the restructured power industry which promised lower power costs.

In the same Jan. 16 issue of the Inquirer, Peter Wallace’s column, “Putting our power supply at risk,” also came out, arguing that Meralco had nothing to do with the P4.15/kWh increase in the generation charge and that the Supreme Court wrongly intervened on the issue brought before it by the petitioners, and that the petitioners/critics should be the ones to shoulder the extra increase (carrying charges?) should the Supreme Court decide against the petitioners.

We thank the zealous writer as he pours out his anger, apparently coming from his self-alleged authority on the intricate workings of the power industry. But perhaps, it will do well to quote from the Nov. 15, 2003, decision of the Supreme Court (GR No. 141314) which ordered Meralco to refund to its customers the amount of P30.2 billion that up to now it has failed to fully comply with, yet without extra cost on them. To recall, that Supreme Court ruling states: “The investor agrees, by embarking capital in a utility, that its charges to the public shall be reasonable. His company is the substitute for the State in the performance of the public service, thus becoming a public servant. The compensation which the Constitution guarantees an opportunity to earn is the reasonable cost of conducting a business.

“While the power to fix rates is a legislative function, whether exercised by the legislature itself or delegated [to] an administrative agency, a determination whether the rates so fixed are reasonable and just is a purely judicial question and subject to the review

of the courts.”

We are very optimistic that a favorable decision on the petition will likewise correct many weaknesses in the Electric Power Industry Reform Act and address, among other issues, the needs of potential investors.

Thus, the writer will do better to just respect the workings of the Philippine judiciary and continue to enjoy Filipino kindness and hospitality.

—PETE L. ILAGAN,

president,

National Association of Electricity

Consumers for Reforms,

San Jose, Tacloban City