LAWMAKERS on Thursday denounced the Manila Electric Co. (Meralco) for insisting on implementing a record power rate increase that it has failed to justify before Congress.
Sen. Antonio Trillanes 4th warned that government can take over the utility firm if it continues to be insensitive to the plight of power consumers.
Speaker Feliciano Belmonte Jr., Rep. Elpidio Barzaga of Dasmariñas City and Rep. Neri Colmenares of Bayan Muna party-list said that the power utility firm knew of the scheduled Malampaya natural gas plant shutdown but it did not take steps to address the situation.
Trillanes, during the Senate inquiry into the power rate increase, expressed his displeasure over Meralco’s practice of passing all additional charges to consumers.
The senator said that instead of increasing its power rates, Meralco should do something to reduce the cost of electricity to appease its angry customers.
He warned Meralco officials not to take the issue lightly because aside from Congress, the Supreme Court (SC) is also scrutinizing the power rate increase.
Do not underestimate the wrath of the people. It could be the reason why the government took over Meralco during martial law,” Trillanes said.
He added that lawmakers are sensitive to public sentiment and there could come a time when Congress will pass a measure allowing the government to take over power distribution in the country.
Belmonte said the P4.15 per kilowatt-hour power rate increase, which was approved by the Energy Regulatory Commission (ERC) late last year should be blamed on Meralco and the other power producers who simultaneously shut down while Malampaya was undergoing maintenance repair.
The Speaker lambasted Meralco for hiking its rates even if the country had ample power supply as confirmed by Energy Secretary Jericho Petilla. Petilla told the House Committee on Energy that Meralco sought a P4.15 per kilowatt-hour power rate increase when there was no power shortage.
In its application for a rate adjustment, Meralco told the ERC that it had to hike its rates because it was forced to buy costlier power from the West Electricity Spot Market (WESM) when the Malampaya and other plants shut down.
But Belmonte blasted Meralco’s insensitivity.
“Why do these power plants have to schedule their maintenance all at the same time and coinciding with the Malampaya when they could have done it on a staggered basis? As for Meralco, there were scheduled outages. They could have devised a plan to address the situation in advance. But they didn’t do it. Why the lack of concern?” he told reporters.
“Where is their [Meralco] foresight? They could have alleviated the situation, ask the power plants to take turns in scheduling outage. But Meralco announced their rate hike even before they asked the approval of the ERC as if the approval of the ERC is a long foregone conclusion,” Belmonte, a lawyer, stressed.
Barzaga said Meralco should not have been allowed to hike its electricity rates by P4.15 per kilowatt-hour, the highest increase in Philippine history.
He noted that the utility firm failed to justify the rate adjustment.
“Meralco has not shown the specific data representing the alleged increase in its generation cost on account of the shutdown of the Malampaya plant and other power plants to the House and the Senate which have been conducting inquiries on this,” Barzaga said.
“In the spirit of transparency and accountability, Meralco should present documents that states the actual increase in its generation cost specifying the kilowatts purchased, the amount and the power producing plants in order to justify the amount of P22 billion which it seeks to recover form its 3.5 million customers,” he added.
Colmenares agreed with Barzaga, saying that Petilla’s disclosures in Congress proves that there was collusion among the power plants.
“The fact that the Department of Energy admitted that there was enough supply means that the price of electricity drastically and substantially went up not because there was an increase in the generation costs or lack of supply. It was because energy players colluded or manipulated the price to go up,” Colmenares said.
Sen. Serge Osmena 3rd also questioned Energy officials for their failure to utilize the government-owned Malaya thermal power plant in Pililia, Rizal province during the scheduled shutdown of the Malampaya plant.
He said the plant is capable of generating 600 megawatts, which should have been enough to prevent the power rate increase.
“We ran some simulations and we learned that with just 300 megawatts we could have brought the price down by P20 in the spot market. Why did the government not use the Malaya plant to reduce prices?” Osmena, the chairman of the Senate committee on energy, said.
“You can see just by the pricing signals that there is a shortage and you should have offered whatever reserve power we have,” he told Energy officials who were present in the hearing.
But Abelarbo Sapalaran, Electricity Trading Department manager of the Power Sector Assets and Liabilities Management Corp. (PSALM), said the Malaya plant was shut down in July last year because it was operating at a loss.
He however made it clear that PSALM informed the Energy department, the National Grip Corporation of the Philippines and the Philippine Electricity Market Corporation that Malaya can always provide additional supply if needed.
He said PSALM received a request for them to operate the Malaya plant on December 2.
Emmanuel Ledesma, PSALM president, told the committee that they tried to bid out the plant but there were no buyers.
Petilla, for his part said that since nobody is interested in acquiring the Malaya plant, the government will just maintain it because it can be used to provide power during times of shortage.