Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
Second Regular Session

House sitno. 2716

Introduced by Rep. Winston “Winnie” Castelo

EXPLANATORY NOTE

About 4.5 million Meralco customers, captive at that, must have been
systematically robbed but cannot do anything about it.

Note that as a result of a COA Audit Report, findings show overcharges of
Meralco of PB billion in 2004 and P4 billion in 2007 which are enough to establish that,
the rates granted by the Energy Regulatory Commission (ERB) to Meralco in May 2003
was indisputably unjust and unreasonable.

In this light, this bill calls for a regular regulatory audit of Meralco to be
undertaken by COA and for that matter, simitar power utilities or distributors such as the
Visayan Electric Co. or Veco in Cebu.

Truly, there is a need to teview the reach of Republic Act No. 3019, otherwise
known as the Anti-Graft and Corupt Practices Act in so far as action or inaction by
officials of the ERC might have given Meralco ‘unwarranted benefits, advantage or
preference’ by wanton approval of every request of increase of power rates.

This bill seeks to protect end-users, consumers and customers solely and largaly
dependent on Meralco for their power requirements which already had a long history of
having raked so much profits way above what should have been set as ‘just and
reasonable rates’ to allow retum-on-rate base for it to operate viably.

In fact, under these conditions, Meralco shall be compgiied to refund to the
consuming public all overcharges that are deemed unreasonablyr unjbetly imposed.

most earnestly.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
‘Second Regular Session

pouse Ba no,_0'716

Introduced by Rep. Winstan “Winnie” Castelo

AN ACT
MANDATING REGULAR REGULATORY AUDIT OF MERALCO BY
COMMISSION ON AUDIT AS PRINCIPAL BASIS FOR VALIDATION OF RATES
AS MAY BE GRANTED BY THE ENERGY REGULATORY COMMISSION ON
SUCH POWER UTILITIES AND DISTRIBUTORS AND FOR OTHER PURPOSES

Be it enacted in Senate and House of Representatives of the Republic of the
Philippines in Congress assembled:

SECTION 1. This Act shall be known as the ‘Power Rate Validation Act of
2012",

SEC. 2. Under this Act, the Commission on Audit is mandated to conduct
regular segulatory audit of Meralco and such power ullitles and distibutors as
principal basis for validation of rates as may be granted by the Energy Regulatory
‘Commnission on requests for power rate increases,

N shall serve as a check-and-balance mechanism against otherwise
unreasonable rates that could inflict social and economic costs to various end-users,
customers and the consuming public in general

SEC. 3. Prohibition. — it shall be prohibited for Meralco or sirnilar power
utiities and distributors to fail to comply with the pravision of this Act and violation
hereof shall compel such power utiitbes and distributors to refund overcharges
beyond the prescribed reasonable rates.

SEC. 4. The Commission on Audit shall issue appropriate guidelines to
effectively carry out the provisions of this Act,

SEC. 5. All issuances, laws, decrees, orders, rules and regulations or parts
‘thereof not consistent with this Act are hereby repeated or modified accordingly.

SEC. 6. This Act shall take effect ninety (90) days following its publication in
the Official Gazette and in at teast three (3) newspapers of generat circutation.

Approved, y