Take over electricity firms, government urged

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Saturday, January 11, 2014

A LAWMAKER said the government should take over the power industry after the Manila Electric Company (Meralco) warned of rotating brownouts in the capital and nearby provinces if the Supreme Court (SC) will not allow it to charge higher rates.

The SC issued a 60-day temporary restraining order (TRO) on the P4.15 per kilowatt-hour rate hike, which was supposed to be collected in three installments starting last December.

"If Meralco and the power generators cannot deliver affordable power rates to the public, all power utilities should now be taken over by the state for its operations," Kabataan party-list Representative Terry Ridon said in a statement Saturday.


Ridon, a member of the House committee on energy, said the prospect of blackouts in the Meralco franchise area can constitute as a national emergency justifying the takeover of all power utilities, from generation to transmission and distribution.

"Meralco should thus be circumspect in delivering public statements which seem to blackmail the public to simply accept the reality of very high power rates," he said, referring to Meralco’s 241-page comment submitted to the SC in response to the three petitions questioning the rate increase.

Davao City Representative Karlo Nograles noted that the takeover of power utilities can only happen when Congress declares a state of emergency and gives President Benigno Aquino III emergency powers.

"Congress should study the possibility of granting President Aquino emergency powers to deal with 'catastrophic problems' confronting our country today...The emergency powers shall, however, provide safety nets to ensure transparency and accountability," Eastern Samar Representative Ben Evardone told reporters.

Ako Bicol party-list Representative Rodel Batocabe opposed Ridon, who may file a measure seeking to revoke Meralco's legislative franchise.

"We are a democratic society where the rule of law prevails. As such, you cannot just confiscate or take over any property without due process of law. Neither are we in a state of war or Martial Law," Batocabe said in a text message.

Meralco, the country’s largest power distributor, told the SC that it is not impossible for power producers to refuse to sell electricity to them for failure to pay obligations.

This will then lead to rotating brownouts, particularly during summer months, when demand for power is high.

“Thus, if the Honorable Court, will not immediately lift the TRO and will permanently enjoin Meralco from collecting the increase in generation charges from its consumers, it is akin to enjoining the whole electric power industry from functioning,” the company said.

Meralco also said it had nothing to gain from pass-through charges such as generation, which comprises 65 percent of the electric bill. Distribution accounts for 16 percent while tax and transmission take up 10 percent and nine percent of the pie, respectively.

“As it stands, Meralco is enjoined from collecting from the public the increase in the generation charges amounting to P8.9 billion while the generation companies and the NGCP (National Grid Corporation of the Philippines) may insist on collecting their full billings already,” it said.

The SC granted on Friday Meralco's request to include the NGCP, Power Sector Assets and Liabilities Management Corp (Psalm), Philippine Electricity Market Corp., and some power suppliers and generation firms as respondents in the case since they will be affected by the court's decision.

These entities were also ordered to comment on the petitions on or before January 20. (Kathrina Alvarez/Virgil Lopez/Sunnex)

Local news

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