• Meralco ‘dictated prices’ at WESM

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    THE Manila Electric Co. (Meralco) dictated prices at the Wholesale Electricity Spot Market (WESM) through Therma Mobile’s suspicious biddings when the Malampaya gas complex shut down, an opposition lawmaker said on Thursday.
    Citing documents from the WESM, Bayan Muna Rep. Neri Colmenares said Aboitiz-owned Therma Mobile sold 100 megawatts (MW) of power, which was supposed to be under contract with Meralco, to WESM for P62 per kilowatt hour for 71 times in November and December.

    “Meralco practically dictated the price at that time. We don’t need to prove price collusion in essence. When Meralco confirmed that it asked Therma Mobile to bid power rates at P62, for us, the case is done,” he told reporters.

    Colmenare said Therma Mobile owner and chief executive officer Erramon Aboitiz admitted that the company made very high bids but passed the responsibility on to Meralco, who has “full control of the use of the 100 MW power from Therma Mobile, including pricing and volume offers to the WESM.”

    Therma Mobile “is a mere implementor of Meralco’s price and volume offers to the spot market or WESM,” he said.

    He noted that the collusion did not only jack up power prices in the WESM but in the whole power market, affecting even prices of power outside Metro Manila.

    “Actually, those instances that Meralco, as alleged by Therma Mobile, dictated the price, that’s happily dictating not just the WESM (price), but the market price of [electricity],” said the senior deputy minority leader.

    He said the Energy Regulatory Commission (ERC) should not have approved Meralco’s rate increase because of its “suspicious” and “unexplained” moves.

    Therma Mobile is under a short-term contract with Meralco to provide 234 MW at P8.65 per kilowatt hour (kWh). Only 100 MW is ready for distribution with the balance to be available by the middle of this year.

    Under the contract, Meralco basically owns the 100 MW.

    From October to November last year, at least eight power plants simultaneously closed down, leaving the prices in the spot market in the hands of three power generators: Therma Mobile, Bauang Diesel Power Plant, and Limay Combined Cycle Plant.

    According to Colmenares, during the scheduled Malampaya shutdown, Therma Mobile’s 100 MW were sold to WESM at P62 per kWh for 71 times, even though it was already owned, technically, by Meralco.

    “Meralco can bid the 100-MW power at zero because they already contracted it. What they did was they asked Therma Mobile to bid at P62, resulting to jacked up prices in WESM,” he said.

    The power utility could have tapped its 1,000-MW reserve when several plants went off the grid. Of the 7,000-MW energy requirements of Meralco, 90 percent is already contracted from power generators, while 10 percent is bought at the WESM. The power utility owns 65 percent of the country’s power supply.

    Citizens Battle Against Corruption (CIBAC) Party-list Rep. Sherwin Tugna said Congress should review the Electricity Power Industry Reform Act (EPIRA), the law often blamed for soaring power prices.

    He called for the review of the provision on the automatic pass-on rates and revisiting the role of the ERC’s powers, authority and responsibility over rate hikes.

    “It would appear that since this [power rate]issue surfaced, it’s like officials are pointing fingers and ultimately, the question of the people, where does the buck stop? Who is responsible for this?” Tugna said.

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    10 Comments

    1. This allegation of Rep. Colmenares is explosive and some individuals should be made answerable. The allegation says that MERALCO dictated its sister company Thermo Mobile to sell at a very high price at 62 pesos per kilowatthour to MERALCO thru the WESM the electricity its sister is bound to sell to MERALCO at a previously completed contract price of 8.62 pesos per kwhour. The other two players at WESM priced as a result their electricity to 62 pesos kwhour which MERALCO also bought. Then MERALCO asked for an increase in the rate charged to consumers to ERC reflecting thereon the 62 pesos per kwhour they bought from WESM which they themselves manipulated thru their sister company Thermo Mobile!!! ERC should be made to answer and MERALCO should be asked to answer their action which is a betrayal to their franchise as a public utility and a monopoly at that..

    2. naku, eh napakalaki ng utang na loob ni Pnoy sa mga Lopez…sa campaign advertising na lang noong 2009, eh….walang gagawin yan kundi payagan namang makabaw ang Meralco…

      Listen how Petilla sounds so much like lawyering for Meralco…everytime! Because he is!

      Mga walanghiya itong mga Yellows at LP….never again!

      • Sorry po, pero hindi na sila Lopez ang may-ari ng MERALCO, sila pangilinan na at ang San Miguel.

      • Lopeses are better than MVP, sobra na MVP ikaw ang may-ari ng mining company sa Benguet na sumira sa kalikasan at ngayon ikaw din ang sisira sa buong Pilipinas dahil sa interest na kinikita mo sa Meralco, ay nako tama na ikaw din ang may-ari ng PLDT, Smart etc, hindi mo naman madadala ang kayamanan mo sa hukay ng kamatayan, ikaw din ang Diyos ay palaging nakatingin sa atin. Bakit malaki ba naibigay mo kay Pnoy during election?

    3. siguro napapanahon ng buksan ang bataan nuclear plant ng para naman maging mura ang kuryente sa pilipinas.ang meralco ang syang nagiging diktador sa gusto nilang presyo sa kanilang kuryente.kaya bayan ko kumilos na habang maaga pa at mag isip ng magandang solusyon sa ikakaganda ng presyo sa kuryente

    4. I heard maybe Ricky Carandang resign because his moving to MERALCO… to take care of business(business interest of PNoy). In 2013 MERALCO earns 17billion imagine. Baka e shortchange nila si Pnoy kaya Carandang is there to look after PNoy’s interest just maybe lang.

    5. apolonio reyes on

      This is the results when a candidate accept POLITICAL CONTRIBUTION (P300M) FROM OLIGARCHS. BINABAWI NG MGA OLIGARCHS ANG KANILANG CONTRIBUTIONS 1000 X1000. SABI NGA NI BRO. MIKE VELARDE ” SIKSIK, LIGLIG AT UMAAPAW”,- ANG PALIT NG CONTRIBUTIONS. ANG PROBLEMA DITO AY SA ATIN BINABAWI NG MGA OLIGARCHS ANG KANILANG POLITICAL CONTRIBUTION, DI BA MVP, ABOITIZ ??

    6. MERALCO’S INCOME FOR 2013 17B AND YET THEY STILL WANT AN INCREASE. IT’S NO LONGER GRID, THAT’S WHAT WE CALL GREED… MERALCO GREEDINESS AT IT’S BEST