answer the following:1.What inefficiencies does the over recovery impose on the market?2. Aside from the government directive, what can be done to prevent Meralco from overcharging? Consumer group People Opposed to unWarranted Electricity Rates (POWER) called on the EnergyRegulatory Commission (ERC) to proceed with an inadvertently leaked directive ordering the ManilaElectric Co. (Meralco) to refund P6.927 billion in overrecoveries charged to its consumers from January2014 to December 2016.Details of the directive were posted on the ERC website last May 4 but later taken down. ERCCommissioner Josefina Magpale-Asirit confirmed the existence of the directive but said the commissionen banc has yet to finalize the order next week.Meralco wants the figure reduced P5.847 billion, saying it is entitled to retain P1.08 billion in property taxpayments from the overrecoveries. Meralco also wants the refund to be done over a period of 36 months."ERC should not allow Meralco to pass on its real property taxes to its consumers nor should it be allowedto keep enjoying the fruits of its overcharging. As a matter of justice, the full refund should be reflectedin next billing cycle," said POWER.The group said Meralco had already reaped the full benefit of overcharging P6.927 billion from itsconsumers in the last three years."Every second that Meralco is allowed to retain and benefit from that money is a stroke of injustice toevery electricity consumer and the public at large. ERC should order Meralco to return the whole amountimmediately," the group stressed.The group lamented that Meralco's overcharging did not only mean higher monthly bills but higher pricesof goods and services for the entire country, since most of the country's offices and factories are locatedin the Meralco franchise area.POWER urged the ERC to come up with a way to determine such overrecoveries immediately."Allowing a giant like Meralco to overcharge its hapless consumers for three (3) years is bordering on thecriminal," they said.

Meralco has the monopoly in the power sector and because restriction reason to enter in this market…

Answered: 1.What inefficiencies does the over…

1.What inefficiencies does the over recovery impose on the market? 2. Aside from the government directive, what can be done to prevent Meralco from overcharging?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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