Senators commend ERC decision on rate hikes

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Thursday, March 13, 2014

SENATOR Antonio Trillanes IV commended Wednesday the Energy Regulatory Commission (ERC) after releasing its findings that prices on the Wholesale Electricity Spot Market (WESM) during the shutdown of the Malampaya power plant last year could not qualify as "reasonable, rational and competitive."

"We commend the ERC, however late, for its findings that there was a market failure and ordered the Philippine Electricity Market Corp. (PEMC) for the recalculation of electricity spot market rates during the Malampaya shutdown in November and December 2013. At least, the public is spared from the heavy burden of huge and unreasonable rate hikes being proposed by Meralco," said Trillanes.

Trillanes also urged the ERC to hasten its investigation on determining who should be liable for this market failure, which points to possible collusion among power players.

In a news briefing, ERC Executive Director Francis Saturnino Juan announced the agency's decision to void the spot market prices that were implemented in November and December 2013 and ordered PEMC, operator of the Wholesale Electricity Spot Market, to recalculate the prices during this period. ERC estimates to cut the increase in generation charge by half, thereby negating the ERC-approved plan of Meralco to implement up to P4.15 per kilowatt hour power rate increase, the highest in the country’s history.

"The ERC should always practice its mandate of protecting the rights and welfare of power consumers, not only in times when they are being criticized by the public," added Trillanes, who previously criticized ERC due to its inefficiency to scrutinize Meralco power rate hike proposals.

For his part, Senate President Pro Tempore Ralph Recto said that ERC decision covers Luzon coops.

The ERC decision, Recto said, reads in part that "it voids Luzon Wholesale Electricity Spot Market prices and declares the imposition of regulated prices in lieu thereof."

"This means that customers outside the Meralco franchise area stand to benefit as well from the implementation of the ERC order," he said.

Recto further explained that the ERC decision orders the Philippine Electricity Market Corp to calculate and implement the regulated prices in the revised WESM bills of the affected distribution utilities in Luzon.

Coops and distribution utilities in the cities and provinces of Luzon which bought power using the disallowed October December WESM prices will have to refund their customers, he added.

"So it is not just Meralco customers who stand to gain relief, but customers of other electric coops which sourced power from generation companies at prices and terms the ERC has ruled as onerous," Recto said. (Camille P. Balagtas/Sunnex)

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