The United Filipino Consumers and Commuters (UFCC), led by its president RJ Javellana, on Thursday denounced Meralco MPower’s new rate increase for electricity of its small business consumers who are subscribers of its Retail Electricity Supply Agreement (RESA).
The RESA is an agreement between Retail Electricity Supplier (RES) companies like MPower and its business consumers, mostly small business operators like hotels, supermarkets, convenient stores, apartment owners, and agriculture, electronics, and plastic manufacturers and other packaging services.
It is an energy-based fixed pricing product, which fixes the monthly retail supply charge to P3.50 per kilowatt-hour. Should the customer exceed their consumption beyond the contract capacity, MPower will still provide the power required at the same contract price.
The contract is binding and guarantees clients with fixed price per kilowatt-hour during contract duration, “the very essence of their subscription to RESA,” UFCC said in a statement.
“However, due to alleged unprecedented increases in the global prices of oil, coal, gas, and other fuel sources, MPower, which is both a supplier and distributor of energy product, announced it will implement a fuel cost adjustment and the increase will be reflected in the next billing period,” it added.
The rate increase is in contrary to the fix pricing objective set in the RESA, the group said.
Meralco and MPower had yet to react to the issue as of posting time.
“RESA’s fixed rate would range from P3.50 to P4.00/kwh. From January to April this year, MPower made adjustment with additional P2.80/kwh, almost an 80% increase,” UFCC said.
Javellana said MPower’s move to adjust its rate is anti-poor, “as it will not only cause suffering for its direct clients who are still reeling from the economic impact of the COVID-19 pandemic but will trickle down to wage earners who are now threatened by layoffs should the cost for running businesses increase due to power rate adjustments.”
He said MPower’s 80% rate increase is “immoral and a bad practice” after the company “retroactively charged consumers for electricity consumption that has been paid already for many months ago.”
“This is grossly disadvantageous to small businesses, especially since they’ve already priced this into their past cost of goods sold,” Javellana said.
He questioned the integrity of MPower “to provide critical services to the public, in which it compared the MPower to other RES companies who refrained from setting additional charges.”
Javellana said that while MPower has the right to adjust its rate during “extraordinary” times like the alleged successive increase of fuel prices in global market, “it did not provide measures to reduce the prices of electricity when fuel prices are low.”
He challenged the incoming Marcos Jr.’s administration to also look into the prices of electricity in the country “inasmuch as it promised to look into reducing the prices of rice.”
“High cost of electricity is one of the reasons why foreign investors are reluctant to do business in the country,” the UFCC president added.
Javellana also called on Congress to use its oversight power to look into the Retail Electricity Supply Agreement and “to hold MPower accountable for betrayal of public trust for not honoring the fixed pricing of its energy product.”