Manila Electric Co., just like its millions of customers, is adjusting to the new normal forced by the COVID-19 pandemic. And things may take time before operations and Meralco’ relationship with consumers take a semblance of normalcy.
Meralco, hampered by the enhanced community quarantine imposed over Luzon, had to resort to consumption estimates on its billing process based on the customers’ electricity usage three months prior to the quarantine, a practice allowed by the Energy Regulatory Commission in cases where meter reading is not practicable.
Meralco, nonetheless, asked customers to just ignore the bill estimates used for March and April—the initial period of the quarantine on Luzon where a large section that accounts for over half of the Philippines’ gross domestic product is covered by the franchise. It told customers to wait for the actual reading that should be reflected in the May bill if operations were fully back to normal.
Not everyone had their meters read in May, however. Quarantine restrictions still left some 2.8 million meters or 40 percent of customers unread. These customers will get a billing that covers four months’ consumption, instead of three.
Meralco, in the meantime, agreed to the ERC’s advice to extend payments on consumption during the ECQ to up to six months for those consuming 200 kilowatt-hours a month or less based on their February bill.
The higher consumption of residential customers in March, April and May, according to Meralco, was normal given the hotter temperatures during these months.
“What isn’t normal this year is that power usage shifted to homes from offices and shopping malls as the pandemic forced Filipinos stay and work from their residences. Imagine the time you would have spent elsewhere for leisure or work during those months if not for COVID-19 restrictions,” an official said.
Meralco said the bill shock caused by pandemic underscored the need to speed up the implementation of its Smart Grid project, which unfortunately was stalled by regulatory lag over the past few years.
A key feature of this project is the installation of smart meters that allow customers better control of their consumption. The Smart Grid will also tell Meralco when something is wrong within the network, preventing such things as circuit overload that in recent months caused hour-long brownouts in several residential areas.
Meralco originally envisioned to have 3.3 million smart meters installed by 2023. So far, the ERC has allowed less than 200,000 smart meters deployed. For those with smart meters, which include top 1,000 customers of Meralco, the bill shock was a non-issue because their meters were read remotely.
These customers account for most of Meralco’s collection during the ECQ, which in April dropped to 3 percent of the total. The low collection rate is hurting Meralco financially. But the pain is more severe for power generators, who according to the ERC, account for up to 55 percent of the electricity bills.
Meralco only collect around 20 percent of the bill as distribution charge, revenues that are spent mostly to maintain and upgrade its network that keeps the lights on.
Lost revenues
The government is badly in need of additional revenues to fulfill the promised financial support under the Bayanihan to Heal as One Act.
But funds to provide amelioration package to poor families, displaced workers and family of healthcare workers who were stricken and succumbed to the coronavirus disease 2019 (COVID-19) are on the verge of drying up,
One possible source that the government could seriously look into is the lost revenue due to the increasing proliferation of illicit cigarettes in the market.
Foregone government revenues corresponding to these fake and smuggled products must run in the hundreds of millions, enough to fund the current efforts of the government to compensate healthcare workers who succumbed to COVID-19.
While the country is under the ECQ during the last three months, law enforcement agencies led by the Bureau of Customs has been busy with successive raids on different illicit operations scattered throughout the country.
The raids resulted in the seizures of hundreds of millions pesos worth of fake cigarette products, machineries and other materials necessary in the production of cigarettes including fake tax stamps.
BOC agents and the local police in Valenzuela City on May 1 raided a warehouse at Cabral Industrial Park in Barangay Lawang Bato and confiscated 280 master cases (140,000 packs) of assorted counterfeit cigarettes.
On May 12, law enforcement agents raided a warehouse at Global ASEANA Business Park 1, San Fernando, Pampanga. Seized in the operation were approximately 700 cases of non-duty paid cigarettes.
And on May 26, three Chinese nationals and four Filipino workers were arrested at an unregistered warehouse in Sta. Maria, Bulacan. The operation led to subsequent raids and discovery of huge warehouses in the towns of Naguillan and Alicia, Isabela with the estimated BoC haul at P2.3 billion consisting of fake cigarettes, raw materials and counterfeit tax stamps.
These are just a sampling of successful operations launched by government authorities in recent months. Illicit trade robs the government of potential revenues. Along with alcohol products, tobacco items are the Philippines’ biggest contributor to excise taxes and the main source of funding for the government’s Universal Health Care Program. If left unchecked, the proliferation of these illegal products in the market can seriously threaten the government’s ability to fund its health care programs.
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