Gov’t, power companies urged to pay for generation costs

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The government and the power generation companies should shoulder the cost of increased generation charges as a result of the outages of power plants, a House leader said Monday.

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Rep. Reynaldo Umali of Oriental Mindoro province, Chairman of the House Committee on Energy, made the stance in light of the Supreme Court issuing a Temporary Restraining Order on the scheduled P4.15 per kilowatt hour power rate hike of power distribution firm Manila Electric Company.

“The TRO is good news because it is relief for the people. Now, the burden of paying the costs resulting from the outages should be sourced from the Malampaya fund and the power generation companies,” Umali said in a telephone interview.

Umali earlier warned that while issuing a TRO is favorable to consumers, it could be also be a threat to power supply since Meralco is under contract with various power generation companies.

The Malampaya fund is the government revenues earned from the private companies that utilize the Malampaya natural gas plant in Palawan. Under existing law, the Malampaya fund should be used for energy development initiatives and other projects as deemed by the President.

“We could use at least P10 million from the Malampaya fund to pay for the generation costs. The power generation companies also have to spend,” Umali argued.

“With the issuance of the TRO and Meralco under contract with power generation companies, it’s possible that Meralco would defer its payments to the power generation companies. Somebody has to pay. Otherwise, we can’t afford to have these power generation companies to cut their supply for Meralco,” Umali added.

Rep. Elpidio Barzaga of Dasmarinas, for his part, viewed the TRO as a wake up call for the Energy Regulatory Commission (ERC) which allowed the unprecedented Meralco rate hike of P4.15 per kilowatt hour but disallowed an increase in January.

“It is a welcome relief for Meralco’s customers and a slap on the face of ERC. The ERC when it noticed the public anger backtracked from its previous position that it did not have the power to deny or suspend Meralco’s price hike and announced lately that it has issued an order suspending the price hike for January,” Barzaga said in a separate text message.

“I am hoping that the Supreme Court’s final ruling will be in favor of Meralco’s customers,” Barzaga added. LLANESCA T. PANTI

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