Government told to explain power rate hike

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Thursday, January 9, 2014

MANILA -- The Supreme Court (SC) denied on Thursday the government’s request to be excused from explaining the approval of the record power rate hike for customers of the Manila Electric Company (Meralco), the country’s largest electricity distribution firm.

In a three-page resolution, the SC ordered the Office of the Solicitor General (OSG) to comment on the consolidated petitions on or before January 17. It also tasked the OSG to attend the preliminary conference on January 13 as part of the preparations for the oral argument on January 21.

Government lawyers earlier left the responsibility to Meralco to defend the P4.15 per kilowatt-hour rate increase, saying it was not directed by the SC to do so under the Rules of Court.

The Energy Regulatory Commission (ERC), which approved the increase last December 9, and Department of Energy are Meralco’s co-respondents in the separate petitions filed by the Makabayan bloc in the House of Representatives, the National Association of Electricity Consumers for Reforms (Nasecore) and Anakpawis, et al.

Meanwhile, the SC ordered the petitioners to include the power producers and the Philippine Electricity Market Corp. as respondents in the case.

PEMC, SEM-Calaca Power Corp., Masinloc Power Partners Corp., Therma Luzon Inc., San Miguel Energy Corp., South Premiere Power Corp., and Therma Mobile, Inc., in turn, were asked to participate in the preliminary conference and submit their comment to the petitions not later than January 20.

Meralco records show that these power producers have existing supply agreements with the distribution firm last November when the generation costs had to increase as a result of the month-long maintenance shutdown of the Malampaya natural gas plant off Palawan.

The government is currently investigating allegations that Meralco connived with power producers to create a scenario of shortage of electricity, which was the basis for buying more expensive power from the Wholesale Electricity Spot Market (WESM).

"Petitioners alleged that a 'very high ceiling price was revealed, at P62/kWh sold at the WESM, while normally the price is way below this on the average in the spot market...," the SC said.

The rate hike was halted by a 60-day temporary restraining order (TRO) issued by the High Court. (Sunnex)

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