Malacañang rejects lifting of Meralco TRO

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MALACAÑANG on Wednesday opposed a petition to lift the Supreme Court’s temporary restraining order (TRO) on power rate adjustments as it warned the Manila Electric Co. (Meralco) and power generators that President Benigno Aquino 3rd will apply the full force of the law if there was collusion in setting electricity prices.

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“[The] government believes that unjustifiable price hikes should not be passed on to the people. Therefore, the proposed petition for the lifting of the TRO is not consistent with the public interest,” said Presidential Communications Secretary Herminio Coloma Jr.

Coloma said the “electric power industry is imbued with public interest,” and “public interest dictates that electric service be provided continuously and without unjustified interruption.”

“As the President has pointed out, the trigger for the significant power rate increase that is now at issue in the Supreme Court was a foreseeable event for which Meralco and other industry players should have prepared,” he said.

“The President also believes in enforcing the provision of the Epira [Electric Power Industry Reform Act] on possible disgorgement of profits if current investigations by the DOE [Department of Energy] and the DOJ [Department of Justice] will establish that there has been collusion among the industry players,” he added.

On Meralco’s threat of “rotational brownouts” if the TRO is not lifted, Coloma said Meralco cannot do whatever it maybe planning to do.

“To recall the President’s previous statement: ‘Under Article II, Section 5 of our Constitution’s General Welfare provision, I think it is incumbent that, inasmuch as this situation greatly affects the welfare of so many of our countrymen, we should know what actually transpired and what corrective action should be undertaken to address that situation,’” he said.

On Tuesday, Meralco asked the Supreme Court to lift the 60-day TRO on the P4.15 per kilowatt-hour (kwh) rate increase it wanted to charge late last year.

Meralco lawyer Victor Lazatin argued that outages will be inevitable during the summer season between March and June because the generation charge will remain at P5.60 per kwh while demand for electricity rises by 8 percent to 17 percent.

But Coloma said that being public utilities, Meralco and other power firms should uphold the people’s interest.

“Unjustifiable price hikes will not be tolerated. Secondly, collusion will not be allowed and they [power producers]should have been prepared and they cannot reason out that they were not able to prepare [for the effects of the maintenance shutdowns],” Coloma said.

He blamed the power producers and Meralco for ignoring what was “foreseeable.”

The DOE is investigating if there was indeed collusion among power players to raise electricity prices. The DOJ is holding its own inquiry.

The Office of the Deputy Executive Secretary for Legal Affairs (Desla) has acted on a complaint filed by the Akbayan party-list against Energy Regulatory Commission Zenaida Ducut who it accused of gross neglect of duty for allowing Meralco to dictate power rates.

“The DOE and the DOJ are pursuing their parallel investigations without any interference from the Office of the President or from any other office, because we want an objective and impartial determination of the facts, so that the proper conclusions may be reached and that these conclusions will serve the public interest,” Coloma said.

The ERC maintained it was only asked by Meralco to approve its plan to stagger the unprecedented December rate hike.

In a text message to The Manila Times, ERC spokesman Francis Saturnino Juan said Ducut denied any irregularity when it gave Meralco the green light for the staggered generation cost-recovery of Meralco, and the decision was made only to soften the rate increase’s impact on consumers.

In her previous statement, Ducut said what the ERC approved last December 9was the clearance sought by Meralco to stagger the collection of its generation cost for November, and not the P4.15/kilowatt-hour rate increase, which was calculated in accordance with the Automatic Rate Adjustment (AGRA) Rules promulgated by the ERC as a collegial body in 2004.

Distribution utilities can calculate their monthly generation charges based on the formula in the AGRA rules to recover their allowable generation costs without passing them on to the consumers.

Last week, Reps. Walden Bello and Ibarra Gutierrez of Akbayan party-list filed a verified administrative complaint against Ducut, accusing her of “gross neglect of duty and incompetence by tacitly approving without the barest hint of due process Meralco’s unprecedented power rate hike.”

Bully
Rep. Luzviminda Ilagan of Gabriela on Wednesday said Meralco’s bullying should prod Malacañang and Congress to work on the immediate repeal of the Epira.

Meralco has “tied up its consumers with its electric wires because of Epira. Now they are holding our power supply hostage and threatening us of a power crisis should the Supreme Court decide against their favor and grant a permanent injunction to the all-time high power rate increase that the Energy Regulatory Commission approved in December,” Ilagan said in a statement.

Meralco’s threats of a power crisis should make legislators and Malacañang realize “why basic utilities like electricity should not be left in the hands of big private companies who seek only to make huge profits and not deliver services to consumers,” Ilagan said.

Gabriela, a member of the Makabayan bloc, is one of the principal authors of House Bill 256 that seeks to repeal RA 9136 or Epira.

Enacted in 2001, the law was expected to bring down electricity rates and improve the delivery of power supply to end-users by spurring competition.

During the oral arguments at the Supreme Court on Tuesday, Associate Justice Antonio Carpio derided Meralco for acting as “buyer and seller” at least 25 times while Malampaya was off the grid and at the Wholesale Electricity Spot Market (WESM).

Carpio said Meralco controlled the clearing price of electricity at P62 per kilowatt-hour, the highest possible price at the spot market. He added that while Meralco bought power from Therma Mobile that has a contracted price of only P8.65 per kwh, it passed on to consumers the WESM price of P62 per kwh.

For Sen. Antonio Trillanes 4th, Meralco’s warning of rotating brownouts if the Supreme Court does not lift the TRO is an attempt to blackmail the Court.

“The statement of Meralco has no basis at all. There is enough supply and we are not expecting any shortage to cause brownouts in next few months,” he told reporters.

Sen. Serge Osmena agreed that the country has the “thinnest reserve” of power in March, April and May, but that brownouts can be avoided if the concerned government agencies did their job.

Trillanes said the Senate finance committee is working on a measure that amends Presidential Decree 910 and allow the Malampaya fund to be used to directly subsidize energy consumption of end-users in case of market failure.

With Reports From Neil Alcober, Jefferson Antiporda and Madelaine B. Miraflor

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3 Comments

  1. If this power shortage happening right now is foreseeable as said by our president. I think it is also the government’s duty to plan for our power requirements. This administration should stop the blaming and do better actions.

  2. Uh…I believe that’s what Meralco was trying to warn (not threaten) us about: That they cannot continue to provide for public interest if there is no electricity to buy, duh. And that’s because the gencos are being forced to buy more costly fuel alternatives because their natural gas was cut off AND because ‘somebody’ had this bright idea of not allowing the Malaya power plant to buffer the shortfall, making things even worse by artifically kicking up prices when they submitted empty bids to WESM.

    And who does this fiasco all point to? The Philippine (expletive deleted) government. Their PSALM held Malaya in abeyance, their ERC didn’t prepare for the Malampaya shutdown scheduled a year in advance, and their whole infrastructure mechanism totally neglected new or inactive power-generating facilities. Is it any wonder that this lazy, inept and corrupt administration takes its cue from the rabble-rousing against Meralco? They’re too lazy to think for themselves and it shifts blame away from them.

    This weak, ineffectual administration tried to ride on the reflected glory of People Power by going populist at the risk of losing billions. But what do they care when they have a scapegoat?

  3. An investigation should be made how Meralco was returned to the Lopez family without any payment made to the government. If I remember right, it was said that when Marcos confiscated Meralco from the Lopez Family, they were paid a certain amount. If this is true, then the government should have benefitted from the return of the company to the Lopez family freely and willfully by the cory administration.

    It is just sad that we now have a subservient house and the people cannot expect these politicians to move against an oligarchy who supports their own candidacy every election!