New power rate hike looms

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THE Manila Electric Co. (Meralco) is poised to collect an additional rate increase for the January billing of its customers even if the Supreme Court has yet to lift its temporary restraining order (TRO) blocking the implementation of the P4.15 per kilowatt-hour rate hike granted by the Energy Regulatory Commission (ERC) last year.

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Meralco officials said they will seek clarification from the Court if the company can collect a separate rate increase since the TRO only covers the P4.15 per kilowatt-hour rate hike.

“As indicated yesterday [Tuesday], my understanding is we will have a manifestation to clarify with the Supreme Court. Plus, any January billing will have to be cleared with and approved by the Energy Regulatory Commission,” Al Panlilio, Meralco senior vice president and head of Customer Retail Services and Corporate Communications, told The Manila Times.

He said the Court signified on Tuesday that it issued the TRO on the P4.15-per kilowatt-hour (kwh) increase and not the January hike, an indication that Meralco could raise its January rate even if the TRO that covers the December rate hike remains in effect.

Panlilio said Meralco will also seek the approval of the ERC to charge higher electricity rates retroactive to January.

For January, Meralco billed its consumers the generation rate of P5.67 per kilowatt-hour, in deference to the high tribunal’s order. But it said the preliminary billings from the power suppliers and the Wholesale Electricity Spot Market (WESM) indicate that the January generation charge was P10.23 per kilowatt-hour.

Panlilio said it was his understanding that Meralco is just two steps away from implementing a higher January billing. The company just needs a clarification from the Court and secure ERC approval.

”We will address the balance of the uncollected pass through generation charge for both December and January billing as may be directed by the SC and or the Energy Regulatory Commission,” Meralco spokesman Joe Zaldarriaga earlier said.

Meralco has yet to recover P8 per kilowatt-hour from its customers.

On Tuesday, Meralco asked the Supreme Court to lift the 60-day TRO it issued in December, saying the new rate adjustment will spare the economy from a series of brownouts.

Panlilio said Meralco maintains its position that it had “faithfully complied with existing rules and regulations and observed utmost due diligence and good faith in delivering electric service to its customers.”

Power producers face raps
Lawmakers warned on Wednesday that officials of the ERC and power generation companies (gencos) found to have manipulated prices in the WESM face criminal charges.

Reps. Neri Colmenares and Carlos Zarate of Bayan Muna warned that the ERC officials will be included in the charges because the commission approved Meralco’s record P4.15 per kilowatt-hour rate increase last year. The rate hike was temporarily halted by the Supreme Court.

The lawmakers said other gencos that conspired with Meralco will also be held accountable.

“On the criminal charges for collusion or price manipulation, we can of course look at the element because it’s on the Revised Penal Code, the restraint of trade,” Colmenares said.

During the House Committee on Energy hearing on January 22, Meralco lawyer and director Rey Espinosa confirmed that the utility firm instructed Therma Mobile (TMO) to bid out the 100 MW they have contracted to the WESM 25 times.

Espinosa said the company nominated the price at P62 thinking it would not be dispatched by the system operator because the National Grid Corporation of the Philippines (NGCP) was on white alert, an indication that there was ample power supply.

But because of WESM’s must-offer rule that requires all gencos to make a bid in the spot market during Malampaya shutdown, state-owned Malaya power plant also made an offer at P45 per kWh even though it is not connected to the grid.

Since the WESM’s system operator had nothing to dispatch when Malaya’s “nuisance” bids were cleared, Meralco’s P62 bid was dispatched instead. This resulted in a false notion that there was an undersupply in the market.

Colmenares pointed out that if the dispatch was a mere mistake, it should not have happened 25 times and the public should not pay for it.

“You can’t commit a mistake for 25 times so whatever the reason, whether you were mistaken or you mean it, then the public will not suffer the burden,” he said.

Colmenares said ERC officials who approved the increase can be held liable for neglecting their duties.

“ERC is liable of the criminal charges because even if you could not prove the collusion [in the power rate hike], they have several violations. Under the Anti-Graft law itself, their neglect of their duty, at the very least or at the very most, led to the conscious approval of an unjust rate increase,” Colmenares said.

Zarate blasted Meralco for raising the threat of blackouts if the Supreme Court does not lift its Temporary Restraining Order.

“The statement of Meralco is a clear blackmail to consumers because while they were pointing out that during summer, hydro [plants]are hard to use, they admitted during interpellation that they are not using hydro power plants.”

The lawmakers said there is enough supply because 11,000 megawatts (MW) is available in the Luzon grid but demand is only 8,500 MW.

If Meralco carries out its threats, the government must take over the power utilities to head off blackouts, they said.

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1 Comment

  1. florentino maddara on

    Its good news that we have these party-list groups fighting against these evil schemes of manipulations,strategies by the bright boys of MVP companies, Aboitiz’s, Ayala’s and Lopez;s with the help of our only hope the Supreme Court (Malacanyang bright boys are always lagging behind when it comes to the protection of consumers of electricity, water, prime commodities, etc). They should look also on to the high power costs our electric cooperatives have been imposing on us from Arroyo regime up to now. Every month it keeps on increasing even higher than the Meralco rates! We are also at the mercy of these greedy cooperatives (Board members could have been on the take all along?)! Congress must also schedule an immediate investigation on the above problem.