ERC studies rate hike suspension

Energy Regulatory Commission Chairperson Zenaida Cruz-Ducut faced the joint Senate committees on Energy, Trade, Commerce and Entrepreneurship on Wednesday. Photo By Edwin Muli

Energy Regulatory Commission Chairperson Zenaida Cruz-Ducut faced the joint Senate committees on Energy, Trade, Commerce and Entrepreneurship on Wednesday. Photo By Edwin Muli

THE Energy Regulatory Commission (ERC) is considering stopping the Manila Electric Co. (Meralco) from implementing the P4.15-rate increase while several government agencies are trying to determine if power producers conspired to shut down several plants to manipulate electricity rates.

ERC Chairman Zenaida Cruz Ducut told the Senate energy committee chaired by Sen. Serge Osmena 3rd that her agency had taken measures to find out if the power rate hike is a result of collusion among power producers.

If there was collusion, the ERC will impose penalties and recover the additional charges passed on to consumers, Ducut said.

The ERC, Department of Energy (DOE) and the Philippine Electricity Market Corp. (PEMC) are reviewing the unscheduled synchronized shutdown of power plants while the Malampaya plant was undergoing maintenance repair.

The panel will release its findings on December 30.

Ducut said the ERC will study the possibility of suspending the collection of the rate increase while the review committee conducts its inquiry.

Sen. Ralph Recto said it would be better if Meralco froze the rate hike on its own.

“What if it turns out that there was collusion? What will happen now? The consumers had already paid,” Recto said.
The P4.15-increase will be in three monthly installments, the first to be collected this month.

At the same time, a DOE official admitted that the record power rate increase is but a prelude to a bigger power crisis that could hit the country in 2015.

DOE Undersecretary Raul Aguilos said Filipinos will have to endure power outages unless the government builds additional power plants.

Aguilos said that if the power supply is not be improved, large areas in Luzon be hit by frequent blackouts two years from now.

Recto echoed the energy official’s warning, saying the demand for electricity surges as the economy heats up.

“This issue on high power rates is just the tip of the iceberg if government will not come out with a comprehensive plan to encourage more power plants to supply increasing demand in electricity,” Recto said.

Senate majority leader Alan Peter Cayetano said the government is also earning from higher power rates.

He said Meralco’s original increase rate was P3.44 kiloWatt­hour (kWh) but because of the taxes, the amount rise to P4.15.

Cayetano asked Oscar Reyes, Meralco president, if the difference between P3.44 and the P4.15 are all taxes, and Reyes said it is value-added tax (VAT).

“So it means that the government is also earning? Let’s just be straight to the Filipino people. P3.44/kWH of the P4.15/kWh will go to the generation cost while the P0.71 will go to the government,” Cayetano said.

President Benigno Aquino 3rd has said the government is powerless to stop the power rate increase. He also turned down suggestions to tap the Malampaya fund to pay the additional general charge instead of passing it to the power consumers.

Aquino cited the recent Supreme Court decision, which ruled that the Malampaya fund should be used exclusively for energy development.

But Cayetano and Sen. Antonio Trillanes 4th insisted that the President has several options to spare the public from the record-breaking power hike.

Trillanes said the government could use the Malampaya fund for subsidy. He added that that instead of allowing power companies to pass on the additional charges to consumers, the government should have taken the burden and used available funding or savings to cushion the power rate hike.

Cayetano said one of way to avoid high power rate increases is by removing the tax on natural gas.

On Wednesday, the Court of Appeals dismissed the petition of a consumers group to stop the feed-in tariff (FIT) rates for wind, solar, hydroelectric and biomass energy approved by the ERC.

In a 20-page decision, the CA’s Special Sixteenth Division dismissed the petition for a temporary restraining order and Writ of Preliminary Injunction filed by the Foundation for Economic Freedom (FEF).

FEF groups professionals who are taxpayers and electric consumers.

The ERC had set the FIT per kWh for solar power at P9.68; wind, P8.53; run-of-river hydroelectric power, P5.90 and biomass, P6.63.

The group accused the ERC of grave abuse of discretion amounting to lack or excess of jurisdiction when it refused to dismiss the petition of the National Renewable Energy Board which sought the Feed-In Tariff on the grounds of prematurity.

The FEF said there were no renewable portfolio standards and standards rules yet and there was no maximum penetration limits study which was done prior to its filing.

But the CA said it gives weight to “the interpretation by administrative agencies of their own rules and regulations, considering that they are in the best position to do so in those area coming within their special and technical forte.”

“As to FEF’s arguments regarding prematurity which are founded primarily on Section 7 of Republic Act [RA] 9513, the basic principles of statutory construction militate against such claim,” it added.

The ruling was penned by Associate Justice Pedro Corales and concurred in by Associate Justices Sesinando Villon and Samuel Gaerlan.


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  1. With what happened to the water companies…and now, this! The Philippines may as well kiss foreign investments goodbye!

  2. Joseph Montilla on

    The President said the gov’t. is powerless to stop the power rate increase. He also turn down the suggestion to tap the Malampaya fund to pay for the additional charges instead of passing it to the consumer or the general public. Wow! What kind of a president we have, who doesn’t care for the masses or the good of the people. I thought we are the boss. Why don’t he follow the advise of Sen. Trillianes or Sen. Cayetano. Trillianes say is to use the malampaya fund for subsidy and Cayetano say to remove the tax from the natural gas. Mahirap bang gawin yon? Masarap ding matikman ng taong bayan ang Malampaya fund to subsidies the increase. Where is now the 900million Malampaya fund that resently made the headline that became a pork barrel for the lawmakers that went to Napoles NGO?
    We have a president who is good for nothing president. If there will be a power increase, next is all the prices will go up transpo, basic commodities, fuel, and salary should also increase next is People’s Power.
    By the the way, why is Ducut is still in office? Ducut is involved w/ Napoles giving also her PDAF to the fake NGO’s of Napoles and served also as a middleman collecting 5% for every PDAF she brings to Napoles from a lawmaker.Biazon resign his post as BOC commissioner, why don’t she resign too, out of delicadesa?

  3. Si Sen. Serge Osmena ay engineer at alam nya na ang mga plant engineer ng mga power plant ang syang nag schedule ng maintenance ng kanilang planta. Bakit di nya ipatawag lahat ng mga plant engineers at tanungin bakit sila sabaysabay nag schedule ng plant maintenance at hindi ang Meralco President na si Oscar Reyes at si Ducut ng Ducut lang ang gawa?
    Bakit kapag installment ang increase ay sisingilin tayo ng interest ng Meralco pero kapag sobra ang siningil sa atin ng Meralco, na hangang ngayon ay di pa nasusuling lahat, pinapatungan ba ng Meralco ng interest ang pera natin?
    Di ba ang First Gen, isa sa makikinabang sa sabay sabay na shot down ng mga planta ay pag-aari ng mga Lopez na in-law naman ni Sen. Serge Osmena? di kaya dapat mag inhibit sa imbestigation si Serge Osmena sa DELIKADEZA at CONFLICT OF INTEREST kung ito ay tutuo?