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Saturday, February 24, 2024

Probe Meralco terms, ERC told

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Lawmakers have urged the Energy Regulatory Commission to act on what they said were irregular terms set by the Manila Electric Company (Meralco) for 1,800 MW of electric supply that it was set to bid out.

Laguna Rep. Dan Fernandez said the ERC should stop Meralco from proceeding with the bidding until a review and study of its terms of reference (TOR) are completed.

Fernandez said a close examination of the TOR would show these are anti-competitive and discriminatory.

The lawmaker earlier delivered a privileged speech describing Meralco as a “monopsony” benefitting from a “market situation with only one buyer.”

Meralco had denied behaving as a monopoly or monosopny.

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The firm said it complies with all government regulations and said Fernandez’s speech contained factual errors and was “riddled with inconsistencies.”

Meralco vice president and head of corporate communications Joe Zaldarriaga also stressed that Meralco complies with all government regulations.

Fernandez accused Meralco of “dictating terms to the suppliers.”

At the hearing of the House committee on legislative franchise on Nov. 22, Fernandez said Meralco’s invitation to bid for a 1,800 MW power supply agreement stipulated that only power plants in operation not earlier than Jan. 22, 2020 are qualified to bid.

“Your provision for your power supply agreement calls for 1,800 MW and if I may read, what you also said in that provision of your bidding — single or portfolio plant provided a power plant should be in commercial operation not earlier than January 22, 2020,” he said.

Fernandez said this stipulation by Meralco effectively proved monopsony allegations against the power distributor as this automatically excluded many of the power plants that should be participating.

“That is trademarking, that is branding. That’s tailor fitting, that’s illegal in accordance with the PCC (Philippine Competitive Commission) and international agreement which states that trademarking is prohibited. It does not allow tailor-fitting,” he said.

“Your responsibility to us (is only as) a distribution utility only. You  have to get least cost. How can you get least cost if many power plants are excluded?” Fernandez added.

ERC Chairperson Monalisa Dimalanta, for her part, said Meralco was told to make sure it is not unduly limiting the number of potential bidders. 

She said a letter was already sent to Meralco stating the ERC’s observations on the published bid invite.

There are currently six potential bidders for the upcoming CSP.  These are GNPower Dinginin (GNPD), First NatGas Power, SP New Energy, Mariveles Power Generation, Excellent Energy Resources and Masinloc Power Partners.

As regulator of the power industry, Dimalanta said the ERC is mandated to promote competition, encourage market development, ensure customer choice, and penalize abuse of market power in the industry.

Also at the hearing, a lawmaker said the TOR for the 1,800 MW supply bid favors certain power firms.

“That is also our concern,” Dimalanta said at the hearing.

“We hope Meralco will be conscientious and not only think of profits,” said Caloocan Rep. Dean Asistio.

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