Sunday, June 18, 2006

PECO’s overcharges

”Watch how the ice melts away
Crystals of fire and heat
Drip drop by drop, now a stream…”

- Sara Mathai Stinus

Cheers to another victory to the cause of the consumers! In a recent decision dated June 9 2009, the Energy Regulatory Commission (ERC) ordered PECO to refund power consumers P2.89 billion pesos worth of overcharges. We have been abused and plundered by PECO for a long time and this is payback time.

An excerpt of the decision reads: “Upon thorough review of the documents submitted by PECO, the Commission found that PECO’s implementation of its PCC (Power Cost Charge) resulted to over-recoveries amounting to PhP2,888,220,748.00 for the period February 1996 to July 2005.”

The then Energy Regulatory Board (ERB) has set a formula for the computation of rates. But PECO with its talent and creativity has managed to go around the formula to squeeze the consumers even drier.

After years of battle, the ERC at last saw the light. It’s a long overdue decision but definitely this is a big blow to PECO. We have to especially thank consumer advocate Atty. Romeo Gerochi who now chairs FDC-Iloilo for the continuous and consistent advocacy against the power giants.

Just imagine the scale by which this power distribution utility exploits rate-making schemes to milk the most from its consumers. That is almost P3 billion in overcharges! And that does not even include interests. Since that amount belongs to the consumers, it is the same situation as if PECO borrowed money from us. The consumers are the creditor and PECO is the debtor. Thus we could even demand from ERC that interests from such amount loaned should be added to the P2.89 billion.

Or we can even see it as the consumers investing billions of pesos to PECO. A return on investment is absolutely right and proper.

While we expect PECO to utilize all its resources to block the implementation of this order, this is nevertheless a reason to celebrate. This decision unmasked once again PECO’s malpractices as this column has since been exposing.

Now, who said that only government-ran agencies are inefficient and corrupt? PECO is a classic example of a private run entity that reeks in inefficiency and corruption. Contrary to the supporters and sponsors of the privatization policy (institutions like the IMF, the World Bank and other international banks), private-ran doesn’t necessarily mean efficiency, competition and lower rates.

The government’s privatization policy is flawed. Public utilities are imbued with public interest and it is the government’s responsibility to promote such interest and should not be delegated to profit-motivated entities.

So, what is the best argument against the privatization of public utilities like power and water services? The clear answer is right before our very eyes – Panay Electric Company.

(Send your comments and reactions to: for text messages to 0919-348-6337; for e-mails to ianseruelo@yahoo.com)