SC casts wider net in power rate collusion case


The Supreme Court wants the cases challenging the record rate increases of Manila Electric Company (Meralco) to include more players in the power industry who may have conspired to manipulate electricity prices.

The Court on Thursday ordered the petitioners in the cases to add to its list of respondents the Philippine Electricity Market Corporation (PEMC) and the owners of six power plants which have power supply agreements with Meralco.

The Court made the ruling on the same day that Meralco announced a new rate increase for January that is not covered by the Court’s restraining order.

The petitioners, Bayan Muna and National Association of Electricity Consumers for Reforms (Nasecore), had named as respondents Meralco, the Energy Regulatory Commission (ERC) and the Department of Energy (DOE).

But the Court wanted to cast a wider net as it searches for solid proof of collusion.

Aside from the PEMC, which runs the Wholesale Electricity Spot Market (WESM), the other new respondents are SEM Calaca Power Corp., Masinloc Power Partners Corp., Therma Luzon, Inc., San Miguel Energy Corp., South Premiere Power Corp., and Therma Mobile, Inc.

The Court said that Bayan Muna and Nasecore failed to include the power producers “for a complete determination or settlement of the claim subject of the action.”

“The petitioners alleged that ‘a very high ceiling price was revealed at P62 per kilowatt hour sold at the WESM, while normally the price is way below this on the average in the spot market’ but failed to implead the PEMC, which was incorporated as WESM’s governance arm, as a necessary party,” it said.

The Court ordered the petitioners to submit their amended petitions not later than January 13.

The new respondents have until January 20 to submit their comments on the amended petitions.

The Court also rejected the motion of the Office of the Solicitor General to be excused from filing a comment in behalf of the ERC and the DOE.

The directives were contained in a resolution authorized by Chief Justice Maria Lourdes P. A. Sereno on the recommendation of Associate Justice Marvic Leonen.

Last December, the Supreme Court stopped ERC and Meralco from carrying out the power rate.

In its petition, Bayan Muna invoked its rights as power consumers to affordable, transparent, and reasonable prices of electricity, as well as the constitutional right to due process and right against monopolies damaging to the public interest.

Nasecore questioned Meralco’s P4.15/kilowatt hour rate hike spread over three billings beginning December.

On Thursday, Federation of Village Associations (Fova) and Federation of Las Pinas Homeowners Association (Folpha) filed a class suit against Meralco, ERC and DOE, saying there was no due notice and hearing on the rate increase proposal.

Meralco however saw no legal impediments in charging another rate increase.

“For the January 2014 billing, Meralco will bill the generation rate at P5.67 per kilowatthour, in deference to SC TRO,” Joe Zaldarriaga, Meralco spokesperson, announced Thursday.

Meralco head of utility economics Larry Fernandez attributed the new hike to the shutdown of Malampaya natural gas complex and the scheduled, extended and forced outages of generation plants in December.

Fernandez said there were more shutdowns and forced outages in December than in November.

The unrecovered generation charge of Meralco due to the Supreme Court restraining order is P3.44 per kwh in December and P4.56 per kwh in January.

House leaders backed the Supreme Court decision including seven power generation companies as respondents in the case against the power rate increase.

“We are in a better situation because now they can give their side in the hearing [of the oral arguments],” Speaker Feliciano Belmonte said in a text message.

House Deputy Majority Leader Sherwin Tugna of Citizens Battle Against Corruption party-list said those liable for the rate hike cannot be held responsible if the power generation companies are not included as defendants.

With a report from Llanesca T. Panti


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