Higher Meralco rates are reasonable, says Malacañang

Higher power rates in areas serviced by the Manila Electric Co. (Meralco) are reasonable that President Gloria Arroyo and the Cabinet need not look into the matter, Malacañang said Sunday. The increase was studied and approved by the Energy Regulatory Commission (ERC) and those opposing it have available remedies they can resort to, deputy presidential spokesman Gary Olivar said. “I don’t see any reason to elevate this to the Cabinet and the President. This could still be discussed in level of the ERC if there are those objecting to it," he said. He said he does not see any evidence that Meralco unreasonably increased power rates, and no one has filed an objection with the ERC. Power generation spurred the brownouts and the increases in power rates, not distribution on the part of Meralco, Olivar said. He said revenue sources and higher collections are needed to finance the repair and replacement of machines for generation and distribution. Meralco said the rise in generation charges stemmed from the high cost of electricity it buys from suppliers National Power Corp., Independent Power Producers and the Wholesale Electricity Spot Market (WESM). Last month the generation charge rose by 93 centavos, from P5.8417 kilowatt-hours in March to P6.7699 kWh, Meralco said, with the sharp rise in electricity prompted by higher prices in WESM, the spot market for trading electricity. The generation cost, which accounts for 50 to 60 percent of the rates charged against consumers, goes directly to the power suppliers. Meralco does not add any mark up on its purchases, the power distributor said. Only 20 to 25 percent of consumers’ electric bills go to Meralco, it said. — SVD/GMANews.TV