Meralco raps own suppliers

SC grants firm’s plea vs power producers

THE Supreme Court has granted the plea of the Manila Electric Co. (Meralco) to include its power suppliers as respondents in the suit that seeks to stop it from raising electricity rates for its 5.3 million customers.

Petitioners who had filed the case against Meralco had accused the power generation companies of colluding to jack up the price of electricity on the Wholesale Electricity Spot Market (WESM).

In its order, the Supreme Court accepted Meralco’s counter-petition to treat the generation companies, the Philippine Electricity Market Corp. (PEMC), and the National Grid Corporation of the Philippines as respondents.

As a result of the ruling, Meralco would become a petitioner in a third-party complaint, said Court spokesman Theodore Te.

In its counter-petition, Meralco asserted that that it merely collected the generation charge and other pass-through charges for the relevant power companies as well as for the national and local government concerned.

“There is simply no motivation, reason or purpose for Meralco to be involved in any alleged collusion relating to generation charges,” Meralco said, in trying to exculpate itself from allegation of collusion to justify the imposition of its power rate hike.

Meralco said it was “grossly unjust and unfair and inequitable” for it to pay the P4.15 per kilowatt-hour charge which it was restrained from collecting as a result of the Court’s temporary restraining order.

The TRO, the company added, put its cash flow at risk and “restricted the delivery of reliable service to consumers.”

“In fact, Meralco has already received demand letters from transmission and generation companies for the full payment of their November 2013 power bills,” it told the Court.

“Meralco is being enjoined from performing an act that it is entitled to perform under the law (i.e. pass on the generation and other pass through charges to customers) without any allegation, much less any proof, of wrongdoing on its part. It there are accusations of collusion between and among the generations companies in order to simulate an electricity price hike, Meralco should not be prejudiced,

penalized and damaged for it is not even remotely involved in the alleged scheme and does not stand to receive any benefit from it,” Meralco said.

“Meralco simply complied with its obligations under the law and all governmental regulations in ensuring the quality, reliability, security and affordability of the supply of electric power to its customers,” it added.

Meralco said it was unfortunate that it was made to bear the burden of the increased generation charges and the ire of the public.

The company also warned that its operations and credit standing would be seriously damaged if it were stopped from recovering the increased cost of power from its customers.

“Considering all the foregoing, Meralco respectfully beseeches this honorable Court to dismiss these consolidated petitions, but not before ruling immediately that the continued effectivity of the TRO against Meralco without a similar order against the generation and transmission companies would prejudice not only Meralco but, the entire electricity supply chain, including ultimately, the public as well,” it said.

Meralco said the generation companies, PEMC and National Grid were “indispensable parties” because they stand to be injured or benefitted by the outcome of the consolidated petitions, which ultimately seek to permanently stop Meralco from recovering the automatic increase in generation charge and other pass-through adjustments.

Named respondents aside from PEMC and NGCP were: First Gas Power Corp., South Premiere Power Corp., San Miguel Energy Corp., Masinloc Power Partners Co. Ltd., Quezon Power (Phils.) Ltd. Co., Therma Luzon Inc., Sem-Calaca Power Corp., FGP Corp., 1590 Energy Corp., AP Renewables, Inc., Bac-Man Energy Development Corp./Bac-Man Geothermal, Inc., First Gen Hydro Power Corp., GNPower Mariveles Coal Plant, Ltd. Co., PANASIA Energy Holdings Inc., Power Sector Assets & Liabilities Management Corp., SN Aboitiz Power, Strategic Power Development Corp., Trans-Asia Power Generation Corp. and Vivant Sta. Clara Northern Renewables Generation Corp.

As petitioner-complainant, Meralco was ordered to pay the corresponding docket fees.

But the Court said Meralco would still be a respondent in the earlier petitions filed by a group of militant lawmakers and consumer groups.

The earlier petitioners were also ordered to include PESM and the power companies in their complaint.

In Congress, two opposition lawmakers blamed the independent power producers (IPPs) for the questionable increases in the cost of electricity.

Bayan Muna party-list Rep. Carlos Zarate and Abakada party-list Rep. Jonathan dela Cruz were one in saying that IPPs are the principal culprits in the unconscionable and steep increases in the cost of electricity to power consumers and businesses.

They said the power producers are responsible for the power that is purchased by distributors who are only charging distribution costs as in the case of Meralco and the National Grid Corp.

Zarate, one of the petitioners in the Supreme Court against the power rate hike, said it is the “scandalous and unjustifiable power generation charges that the IPPs have unconscionably and abusively imposed against helpless power consumers that is the root all the evil in the power sector today.”

“Yes, the IPPs should be blamed because they are also major players in the WESM (Wholesale Electricity Spot Market], they will benefit much when power prices are manipulated.

Already, the IPPs are being investigated for collusion and manipulation of power rates that have caused public outrage and protests, Zarate said.

Dela Cruz, member of the House independent bloc led by Leyte Rep Ferdinand Martin Romualdez, said the IPPs carry the huge burden of the blame leveled against the country’s power sector.

“They are under investigation now as they have obligations to the public that are imbued with public interest and welfare,” Dela Cruz said.

He said IPPs have an open track to manipulate and play with market forces and even create shortages like the “totally disastrous” handling of the Malampaya facility shutdown and the repair of some power plants that had caused a shortage of available power that drove prices up.

The IPPs are not only being investigated by the House but by the Department of Energy and the Energy Regulatory Commission for alleged collusion and manipulation of electric power rates. With Maricel V. Cruz


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