Palace defends Meralco's latest price hike

Malacañang on Friday defended the latest round of power rate increases imposed by the Manila Electric Company (Meralco) amid a power shortage leading to recurrent "rotating brownouts" in the electric firm’s service area. In a press briefing, deputy presidential spokesman Gary Olivar said that the Energy Regulatory Commission approved the P0.93 price hike in generation charges this month after finding Meralco's petition fair. (See: Customers of Meralco to pay increased rates starting April) He further claimed that the people are already aware of the power sector’s need to conduct more maintenance services in order to accommodate the higher electricity demand during the summer months. That could mean additional expenses for Meralco and additional charges on the consumers, Olivar said. “People shouldn’t be surprised if shortage of supply of power is accompanied by higher prices. Chronic breakdowns in generating capacity may call for unplanned maintenance spending or replacement [capital expenses], which might have to be funded from higher prices," he said. Aside from the generation charge, Meralco, the Philippines’ largest power retailer, was also allowed by the ERC to hike distribution rates by 26.47 centavos per kilowatt-hour (kWh). The rate hike was supposed to have taken effect last January, but was voluntarily suspended by Meralco pending hearings on a complaint about rate distortions filed by a customer with reported links to industrial firms.—Aie Balagtas See/JV, GMANews.TV