Congress urged to fast track probe on alleged P66-B padding of Meralco energy sales | Inquirer Business

Congress urged to fast track probe on alleged P66-B padding of Meralco energy sales

/ 05:11 PM November 29, 2020

MANILA — Bayan Muna and Matuwid na Singil sa Kuryente Consumer Alliance Inc. (MSK) are urging the House Committe on Energy to fast track its probe on the reported P66 billion over recovery of the Manila Electric Co. (Meralco).

The groups also asked the Energy Regulatory Commission and the Commission on Audit to fast track their audit of Meralco’s energy sales and purchases from 2011 to 2019 due to significant discrepancies reportedly detected in the giant utility’s declarations to the ERC and its Annual Reports and Audited Financial Statements.


Last August the groups revealed the following findings:

1. Meralco purchased only 33.585 billion kwh of power in 2019 from all its generation sources including WESM but reported purchased power of 46.871 billion kwh in its annual report. The discrepancy is 13.03 billion kwh.


2. The value of their generation purchases was P179 billion as disclosed to the ERC and the consumers but declared purchased power cost of P241 billion in their audited financial statements. The discrepancy in peso value was P66.173 billion for 2019 alone.

3. The effective DSM (distribution, supply, and metering) revenue of Meralco in 2019 was P2.05 per kwh compared to the ERC approved P1.38 per kwh, an apparent over recovery by 49 percent.

4. Consequently, since May 2010, Meralco’s gross profit skyrocketed to almost double to P50 billion average from 2010 to 2014. For the years 2015 to 2018 it averaged P60.24 billion. In 2019, gross profits skyrocketed to P69.066 billion.

5. The pattern of Meralco declaring higher energy sales than what they actually purchased started in 2011 when the over-declaration started at 2.419 billion kwh. It grew over the years reaching 5.6191 billion kwh in 2014, and now an astounding 13.565 billion kwh in 2019 worth P66.173 billion.

Bayan Muna Chairman Neri Colmenares said they were concerned that this is a violation of the regulatory rule that power generation would only be a pass-on charge to the consumers. This means Meralco should only be declaring as sales the actual kwh and value they purchased and that the House Energy Committe should follow through with its initial investigation.

Conversely, the declared kwh energy sales from 2008 to 2010 were even lower than the purchased generation quantity in kwh, in evident better compliance with the pass-on charging for power generation, MSK said. Meralco’s average gross profit then was P27.07 billion a year.

All of MSK’s data came from the Meralco monthly filings of generation costs to the ERC from 2008 to 2019, Annual Reports and Audited Financial Statements of Meralco for the same years.


MSK also said it believes there are unvalidated figures that are making this anomalous practice possible. These figures cover:

a) the true quantity in kwh and value of Meralco’s purchases of power from its power generation suppliers;

b) the true breakdown of the kwh energy sales of Meralco to each of the three class of customers – residential, commercial, and industrial. Further for the residential to be subdivided into small and regular, and commercial into large and small; and

c) the true breakdown of the revenues of Meralco from each of these customer classes.

“We hope that the ERC can also be requested to validate Meralco’s declared purchases and costs of generation and the energy sales to each of the customer class,” MSK convenor David Celestra Tan said, adding “how can Meralco sell more power than it purchased?”

The consumer group expects that a validation of all these numbers can lead to the correction of the distribution charges of Meralco to the residential and commercial customers.

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TAGS: Business, energy sales, Meralco, power secctor
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