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SC stops Meralco bid

Consumers get 60-day relief from rate hikes

THE Supreme Court on Monday stopped the Manila Electric Co. (Meralco) from slapping a P4.15 per kilowatt-hour increase in electricity rates for its 5.3 million customers.

Although the Court is in holiday recess, Chief Justice Ma. Lourdes Sereno, acting on the recommendation of the associate justice in charge of the case, issued a 60-day temporary restraining order to stop Meralco from imposing its rate hike.

Court spokesman Theodore Te said the order also restrained the Energy Regulatory Commission from implementing its Dec. 9 ruling that approved the rate hike.

The ERC ruling allowed Meralco to bill an additional P2.41 per kilowatt-hour charge in December, P1.21 per kWh in February and P0.53 per kWh in March.

Te said the TRO, which was sought by two groups of petitioners, was effective immediately.

The Court also ordered Meralco and the ERC to answer the points raised in the petitions of leftist lawmakers and consumer groups by Jan. 8, 2014, before oral arguments are held on Jan. 21.

Te said the order does not cover charges already billed—collected or not.

“The effectivity date of the TRO is today (Tuesday). As a general statement, a restraining order restores the status quo as of a specific date by stopping certain acts from being done. Now as to the question on the rates already collected, that is not within the scope of our restraining order but it would probably be addressed once the court decides,” he said.

The first petition was filed last Dec. 19 by Bayan Muna Reps. Neri Colmenares and Carlos Isagani Zarate, Gabriela Reps. Luz Ilagan and Emmi de Jesus, ACT Teachers Rep. Antonio Tinio and Kabataan party-list Rep. Terry Ridon.

The second was filed on the next day by the National Association of Electricity Consumers for Reform, the Federation of Village Association and Federation of Las Pinas Homeowners Association.

The petitioners alleged that their constitutional right to due process was violated when the ERC approved the rate hike without conducting public hearings.

They also questioned the speed—just four days—with which the ERC approved Meralco’s petition for a rate hike.

The groups added that the public was also not duly informed about the rate hike because it was not published.

In their petition, the consumers also asked the Court to order the creation of a committee, headed by the Commission on Audit, to audit electricity rate adjustments imposed by Meralco since 2004.

The committee, they said, would determine what amount consumers should be refunded, if the rate hikes were found to be illegal.

Meralco’s rate increase was attributed to the “simultaneous and unscheduled shutdown during the same period” of the power plants owned by private power providers. It was approved by the ERC “without any public hearing or any investigation for possible market abuse,” the petitioners said.

In the wake of the Court order, Meralco president Oscar Reyes said his company was open to refunding customers who were already billed the higher rates.

Reyes said bout 70 percent of Meralco’s 5.3 million customers have already been sent their bills.

“If they have already paid, if we are mandated to refund, we can easily refund,” Reyes said, adding that they have yet to receive a copy of the Supreme Court decision.

“We will have to follow whatever the SC says. Hopefully it will be resolved before the next billing cycle,” Reyes said.

He added a warning: “The last thing you want is to do something that interrupts the delivery of electricity service.”

“If one part of the supply chain can’t function or unable to continue paying its bills, that will have repercussions on the entire supply chain,” he said.

Meralco senior vice president Al Panlilio, said there are three groups that will be affected by the Supreme Court decision: ‘those who have been billed and have paid, those who have been billed and have not paid, and those who are of a different billing cycle and have not been billed.”

He added they will have to look at the ruling’s impact on Meralco’s operations.

Also on Monday, Meralco asked the ERC to defer its payment of about P6 billion to the Wholesale Electricity Spot Market, after the commission ordered it to defer its rate adjustment for January.

The company also said that pending the outcome of the ongoing investigation of allegations of collusion among power suppliers, the ERC should allow it to defer payment to the Philippine Electricity Market Corp., the operator of the WESM, for the supply months of November and December 2013 equivalent to an estimated generation charge of P2.42 per kWh (out of the P3.44 per kWh) or at least P1.44 per kWh representing the deferred generation rate adjustment for November and the difference between the actual generation charge and P7.37 per kWh for the supply month of December.

“Meralco submits there is a legal ground and factual basis for the honorable commission to direct PEMC to defer such collection and for Meralco to defer payment,” it said.

Meralco said that if it is made to pay PEMC on the due date without the ability to collect the same from its customers, such amounts would damage its cash flow and financial credit position, and hurt its ability to finance operations and its capital expenditures.

The Palace was noncommittal on the Court’s temporary restraining order, saying it would wait for the justies to rule with finality on the power rate hike.

“The Supreme Court has always been the final arbiter of any case brought before it especially when the issue is of national importance,” said presidential spokesman Edwin Lacierda.

He added that a study ordered by President Benigno Aquino III on whether the Malampaya fund could be used to cushion the impact of the rate hike was still being conducted.

Colmenares, who was among the petitioners, said he was thankful for “a timely Christmas gift for the people.” With Alena Mae S. Flores and Ronald O. Reyes

 

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