Issues freeze order until plea of big firms vs. higher charges is resolved
The Energy Regulatory Commission (ERC) has issued status quo orders that effectively prevent retail electricity suppliers from increasing their rates to large companies.
Several large companies had earlier asked the ERC to issue temporary restraining orders and cease-and-desist orders to prevent their retail electricity suppliers from disconnecting their supply.
The companies alleged that the retail electricity suppliers breached their supply contracts by imposing higher charges beyond what was agreed and wanted to impose fuel cost recovery adjustments due to the alleged extraordinary increases in fuel costs.
ERC chairperson Monalisa Dimalanta said the status quo would hold until the commission decides on the motions filed before it.
“If consumers are disconnected, not only will the petitioner be affected, but its customers as well. With the disconnection, the supply chain will be disrupted, and a domino effect will ensue downstream,” it said.
The companies said the retail electricity suppliers cited a change in circumstance due to “the unprecedented increases in the global price of oil, coal and gas and other fuel sources to increase the rates.”
Most of the companies filed cases against MPower, Inc. and Vantage Energy Solutions Management Inc., the retail electricity suppliers of Manila Electric Co. (Meralco).
They also filed cases against San Miguel Corp.-owned San Miguel Electric Corp. and SMC Consolidated Power Corp. for alleged breach of retail electricity supply agreements.
Companies who filed cases with the ERC include Winsome Development Corp., Taifini Copper & Conductor, Inc., Quanta Paper Corp., Air Liquide Pipeline Utilities Services Inc. – Balamban, Air Liquide Phils. Inc., Air Liquide Pipeline Utilities Services, Inc., Willin Sales, Inc., Waltermart Ventures Inc., WJ Global Inc., and California Garden Square Condominium Association Inc.
Meanwhile, an infrastructure-oriented think tank asked the ERC to ensure the least cost to consumers as the public braces for higher electricity rates next month due to the termination of San Miguel Global Power Holdings Corp.’s power supply agreement with Meralco.
“More expensive power in the new year is the direct consequence of the ERC’s rejection of the joint SMC Global-Meralco petition to temporarily raise power rates by at least P0.30,” Infrawatch PH convenor and former House energy committee member Terry Ridon said.
“The commission, together with the energy department, should exhibit sectoral leadership and compel power generators to make competing price proposals no higher than the price proposal in the joint petition,” Ridon said.
He said the public would not accept price proposals higher than the proposal in the rejected petition.
“If the ERC entertains price proposals significantly higher than the price proposal in the rejected joint petition, it will have failed to ensure the least cost to consumers, which is one of the most fundamental principles in energy regulation,” Ridon said.
He said the PSA termination resulted in Meralco procuring additional supply from the Wholesale Electricity Spot Market, which translates to prices that are at least 75 percent more expensive than the price in the terminated PSA.
“With unabated inflation and stunted incomes, energy regulators should explain to the public how these elevated rates constitute the least cost to consumers,” Ridon said.
He said energy regulators should blame only themselves if the public experiences bill shock in January.
“This is certain: energy regulators will face a crisis as soon as the January power bills arrive at the doorsteps of ordinary households.
How will they explain to struggling families that they were ultimately responsible for the price hikes?” he said.
Ridon said regulatory rules allow PSA amendments due to extraordinary circumstances.
“This is a power which the ERC could have wielded during the joint petition deliberations if only to stop rates from spiking at the pace that we are currently seeing. They made their bed, but it is the public that will lie in it,” he said.