12 percent profit cap sought for water firms

The congressional inquiry into the allegedly excessive and unfair water rates imposed by Metro Manila water service providers has prompted two administration lawmakers to seek the creation of an independent body that would protect consumers.

To be known as the Water Regulatory Act of 2011, House Bill 4137 was filed last week by Rep. Bernadette Herrera-Dy (Bagong Henerasyon party-list) and co-authored by Rep. Juan Edgardo Angara (LDP, Aurora). The bill also seeks to limit water firms to a profit of 12 percent of their government-audited investments.

The filing of the bill came on the heels of an announcement of a new round of water rates adjustments to be imposed by the two water concessionaires in Metro Manila and its neighboring localities.

Herrera-Dy and Angara followed up their demand for a deferment of water cost increases by filing HB 4137 creating the Water Regulatory Commission that will take over the regulatory functions of existing water agencies, including that of the much-criticized Metropolitan Waterworks and Sewerage System-Regulatory Office.

In pushing the immediate enactment of the measure, Herrera-Dy and Angara stressed the need for the consolidation of regulatory functions of four major economic regulatory agencies for water, namely: the National Water Regulatory Board, Local Water Utilities Administration; local government units, and the MWSS.

The two administration solons underscored the need to address water and sanitation issues confronting Filipinos, saying these should be considered as “utmost human rights.”

“To live in a community that is clean, free from human waste and abundant with safe and affordable drinking water is an utmost human right,” they said.

Herrera-Dy, who sought a congressional investigation into alleged unconscionable water rates imposition in Metro Manila, revealed that despite the bountiful water resources the country enjoys, water remains a commodity denied many Filipinos. She said 20 percent of Filipinos are denied access to potable water supply.

“The poor have the worst access to water and are most of the time, compelled to pay more for water. Moreover, 31 percent of illnesses in the country are water-related due to lack of clean drinking water supply and efficient sanitary facilities,” Herrera-Dy and Angara said.

Under the bill the WRC, an agency to be attached under the Office of the President, will be tasked to regulate the operations of all water service providers, whether public or private, including those supplying subdivision and companies and seepage treatment and disposal services for residential, industrial or commercial use.

It will grant licenses for water and sewerage system operations. Rates for their operations will only be allowed upon approval by the WRC.

Herrera-Dy said the WRC will see to it that due process and public consultations are observed before any petition for hikes in water or sewer service rates is granted.

Under the bill, strict compliance with Commonwealth Act 146, or the Public Service Act, will be observed by limiting to 12 percent the financial formula on ROI. The Commission on Audit will be designated as the sole and official auditor that will determine the “actual physical investments” of water service suppliers and operators.

According to Herrera Dy, the WRC will act as a quasi-judicial body that will resolve conflicts on water and sewerage operations in the country, thus it will have the power to impose fines, charges and other penalties against violators of its regulations.  –Gerry Baldo, Daily Tribune