SC asked to extend TRO on power rate increase

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Wednesday, February 12, 2014

MANILA -- Militant members of the House of Representatives asked the Supreme Court (SC) on Wednesday to extend the validity of the temporary restraining order (TRO) on the record P4.15 per kilowatt-hour power rate hike being pushed by the Manila Electric Company (Meralco).

In a motion, the Makabayan bloc feared that the expiration of the 60-day TRO on February 24 will add billions to the production cost of manufacturers under the Meralco franchise, fueling a steep rise in the prices of goods and services sold all over the country.

Meralco distributes power to the country's economic center, Metro Manila, and some parts of the provinces of Rizal, Cavite, Pampanga, Laguna, Quezon and Batangas.

"If the decision to impose this rate hike is later found to be without basis and reversed, the inflation it has triggered and the high prices of goods already paid by the people can never be reversed or 'reimbursed,'" the motion stated.

Last week, the country's top power distributor told the High Court that the TRO was somewhat unfair since generation and transmission firms that have been "threatening" Meralco to pay its obligations were not covered by the directive.

Meralco said it had nothing to gain from "pass through" charges such as generation, transmission, system loss and taxes. It even warned of rotating brownouts if unpaid fuel suppliers refuse to generate electricity.

"Meralco's warnings of blackouts are baseless especially since respondent DOE (Department of Energy) publicly announced that there is no undersupply of electricity and the supply situation during summer will not result in brownouts," Makabayan said, quoting Meralco's admission that grid peak demand registered on May 8, 2013 was 8,300 megawatts while the reported aggregate capacity or supply is 11,466 MW.

"Any threat of brownout, therefore, is not based on the insufficiency of supply. It is nothing more than threatening the people for the people's exercise of their constitutional right to due process and remedies before this honorable court," said Makabayan, one of the three petitioners against the rate hike.

Its members include party-list groups Bayan Muna, Gabriela, Kabataan and Alliance of Concerned Teachers.

Oral arguments on the consolidated petitions against the rate hike, which stemmed from Meralco's purchase of more expensive power to meet the supply shortfall due to the shutdown of various power plants which overlapped with that of the Malampaya gas facility off Palawan, ended on Tuesday.

In the last hearing, Associate Justice Marvic Leonen hit the Energy Regulatory Commission (ERC) for not consulting its economists and engineers before approving the rate increase, which the petitioners assailed for lack of due process and public hearing.

ERC Executive Director Francis Juan, however, said Meralco can automatically collect generation cost from consumers because this is not included in the charges listed in the implementing rules and regulations of the Electric Power Industry Reform Act (Epira), which requires notice and hearing to the consumers.

Meralco said the exemption was made in 2007 to avoid disconnection or termination of power supply agreements should the distribution utilities encounter difficulty in paying for the power they bought from generation companies. (Sunnex)

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