Lawmakers want ERC to determine power rate hike

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Lawmakers have raised doubts on the reduced power rate hike proposed by power distributor Manila Electric Co. (Meralco), citing Meralco’s failure to recall its P4.15 per kilowatt-hour rate increase that was stopped by the Supreme Court.

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They at the same time said the Energy Regulatory Commission (ERC), not Meralco, should be the one to set power rate increases.

Terry Ridon of Kabataan party-list and Marcelino Teodoro of Marikina City (Metro Manila) also cited Meralco’s move asking the ERC to allow it to charge an additional P0.45 per kilowatt-hour for the January 2014 billing because of the Malampaya natural gas plant shutdown last year.

Meralco asked the ERC to allow the staggered collection of the additional charge. The utility firm wants to collect the rate increase in a period of six months.

“It should be the ERC that should make the actual and full determination of what the imposable rate should be. We cannot rely on the computation of Meralco and the power generators alone because their computation is the main cause of the high rates in the first place,” Ridon, a lawyer and one of those who filed a petition against the P4.15 power rate hike, said in a text message.

“As to whether that is a good or lawful compromise… is best left to the judgment of the ERC, which has the technical expertise and mandate to regulate the electric power industry,” Teodoro, also a lawyer and chairman of the House Committee on Legislative Franchises, said.

He reminded the power distributor that Section 23 of the Electric Power Industry Reform Act mandates a utility company like Meralco to supply electricity at the “least cost” to its captive market.

The mandate is also stated under Section 4 of Republic Act 9209, which granted Meralco a franchise to operate a distribution system for the conveyance of electric power.

The Philippine Electricity Market Corp. (PEMC), the operator of the Wholesale Electricity Spot Market (WESM) where Meralco bought its supply when the Malampaya natural gas plant was shut down in November and December 2013, said WESM sold power at an overprice during the Malampaya outage.

The PEMC said WESM’s price in November 2013 should be pegged at P6 per kilowatt-hour but was set at P25 per kilowatt- hour. As for December 2013, it said the WESM price should be P6.24 per kilowatt-hour— way below the P28 per kilowatt-hour rate that was implemented by WESM.

In seeking the P4.15 per kilowatt hour power rate hike, Meralco argued that it had to buy power supply from WESM for as much as P62 per kilowatt hour.

The Malampaya maintenance outage was made worse by the unplanned shutdown of at least eight other power-generating companies.

In a statement, House Deputy Minority Leader Neri Colmenares also on Wednesday urged the public to make Meralco accountable for the “market failure.”

“Consumers must remain vigilant because it was abuse of market power not just market failure that happened. Who manipulated the under-offering that led to (the) market failure?

They must be held accountable and should be the one to pay, not the people,” Colmenares said.

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