OVER the past couple of weeks, there has been a groundswell of public frustration over what have been steadily increasing electricity bills, with many complaining of bills ballooning by thousands of pesos from one month to the next despite no obvious increase in consumption, or in many cases, in spite of deliberate efforts by households to reduce electricity use. This week, Sen. Panfilo Lacson called for a Senate inquiry into the apparent phenomenon of “electric bill shock.” We agree with him, because widespread public concern over the affordability of a basic public service simply cannot be ignored, and the terms in which Lacson framed his call are sensible.
“While fluctuations in electricity prices may be attributed to supply constraints due to geopolitical tension, higher generation costs, foreign exchange rates, mandatory charges and other market factors, it is incumbent upon the legislature to exercise its oversight function to determine whether existing regulatory mechanisms effectively protect consumers from excessive, unreasonable or avoidable increases in electricity charges,” Lacson said.
We think the answer to the question posed by the good senator is clearly “no,” and that it will, in fact, require the intervention of the legislature to plug the loopholes and correct the inequities that are imposing burdens on ordinary consumers and businesses. For that to be effective, however, the inquiry must be conducted in the right way, and focus on the true root causes of “excessive, unreasonable or avoidable increases in electricity charges.”
To begin with, any inquiry must not focus solely on Meralco, which has been the target of almost all of the criticism reported in both the mainstream and social media, by virtue of Meralco being the nation’s largest distribution utility and the media concentration in the capital. Meralco’s overall rates are by no means the highest in the country, although they are probably in the upper-third of the range, and the factors that affect their overall rates are common to every electricity distributor, whether a distribution utility or an electric cooperative. The problem of “bill shock” is much bigger than Meralco alone.
There is, however, one exception, which also may not be unique to Meralco, although reports of the same problem with other distributors have not yet surfaced. There have been numerous complaints of suspected erroneous meter readings among Meralco customers; for example, in a Facebook post on July 13, a customer in Bulacan reported being charged some P2,000 for approximately 130 kilowatt-hours of consumption, despite her unfinished house having been completely unoccupied for two months and her electric meter (a photo of which was included in the post) reading zero consumption.
Excessive tax burden
While candidly admitting that such problems can occur, Meralco has maintained that they are relatively few in number, and have simply been amplified by social media. That may indeed be the case, but as things now stand, the burden of proving that a meter was misread is on the consumer. A simple fix for this would be to provide electricity customers with a photographic record of their meter reading each month (many customers, particularly those living in condominiums or apartments do not have access to their electric meters) as verification of what is reflected on their bills. Of course, this should not only apply to Meralco but all distributors. It should not take a Senate hearing to accomplish this, but if it does, so be it.
The bigger problems, which again are common to the entire system and not just one distribution utility, are the deregulated nature of the generation sector, and the excessive burden of taxes and subsidies imposed on consumers. Deregulated generation means that there is little control that can be legally imposed on power prices, and these make up more than 50 percent of one’s monthly bill. This is an aspect of the legal framework of Republic Act 9136, or the Electric Power Industry Reform Act of 2001, that must be reexamined.
The other action that Congress can take to ease the burden of high power costs is to reconsider the taxes and subsidies that make up 15 to 18 percent of most customers’ bills. Most of these can and should be eliminated, with that burden transferred to the government, or in the case of the system loss charge, distributors and the grid operator. Solving any of these would also require a change in law, and thus examining them would be a good use of the proposed Senate inquiry’s time.
