Invalidate Meralco’s ‘sweetheart deals’, Bayan Muna urges SC

The Bayan Muna Party-list has joined calls for the Supreme Court to invalidate several alleged “sweetheart deals” between Manila Electric Company and its affiliated power generating companies in 2016, which could result to high power rates for the next 20 years.

In a 28-page petition-in-intervention, Bayan Muna chairman and opposition senatorial candidate Neri Javier Colmenares and Bayan Muna Party-list Representative Carlos Isagani Zarate asked the SC to immediately issue a temporary restraining order and/or preliminary injunction enjoining the Energy Regulatory Commission from approving the said power supply agreements.

The original petition was filed by Alyansa Para sa Bagong Pilipinas, Inc. in 2017.

Bayan Muna also sought to nullify ERC Resolution No. 1 Series of 2016, which reset the deadline for compliance with the competitive selection process (CSP) from Nov. 6, 2015 to April 30, 2016, thus, exempting the power supply agreements (PSA) from undergoing transparent and public bidding ordained in the CSP.

The CSP rules requires power distributors to get at least two offers for supply of electricity before awarding a power supply agreement, ensuring the least cost for electricity consumers.

“There is no reason for the issuance of ERC Resolution No. 1 Series of 2016 other than to facilitate the approval of the several sweetheart and self-negotiated power supply agreements of Meralco and respondents generation compaies, and to circumvent and defeat the CSP Rules and the energy reform policy of the State,” the petition stated.

The petitioners alleged that the intention for the issuance of the said ERC resolution is to give more time to Meralco and respondent generation companies and other players to enter into self-negotiated PSAs in violation of the CSP policy of the State.

According to the petitioners, by extending the CSP deadline from November 2015 to April 2016, the ERC allowed Meralco to enter into seven with its affiliated power generating companies, tying up 3,551 megawatts, or 90 percent of its supply, to 20-year contracts that would cost consumers P12.44 billion a year.

They warned that historically, Meralco’s negotiated contracts with its subsidiary companies were overpriced by as much as 20 percent compared to those of non-related generating companies.

 “Obviously, the ERC knows the benefits of CSP—ensuring a level playing filed, procuring the best offer, ensuring transparency, provides another layer of screening for better price discovery,” the group said.

“And yet, despite these avowed benefts of CSP, the ERC deferred the CSP implementation to a later date. The result of which allowed the biggest distribution utilities in the Philippines, Meralco, to dispose 90 percent of its energy requirement via self-negotiated contracts with affiliated companies; these contract run for 20 long years,” it added.

Besides, the petitioners said ERC violated the laws and its own rules of procedure when it allowed the questioned PSAs to be filed beyondthe extended deadline.

“The ERC circumvented the CSP mandate twice over – first in extending its actual implementation via the assailed ERC resolution, and second in accommodating the late filers beyond office hours and beyond April 29,” the petition read.

Thus, the petitioners asked the Court to declare null and void the separate PSAs of Meralco with affiliated generation companies for their failure to comply with the CSP rules.

“We believe that some ERC officials bent backwards several times to accommodate these Meralco power deals. We repeat our vow to oppose these PSAs and hold officials who allow it accountable,” the petitioners said.

Aside from Meralco and the ERC, also named as respondents in the original petition were the Department of Energy, Central Luzon Premiere Power Corporation, St. Raphael Power Generation, Panay Energy Development Corporation, Mariveles Power Generation Corporation,

Global Luzon Energy Development Corporation, Atimonan One Energy Inc., Redondo Peninsula Energy Inc., and Philippine Competition Commission.