Monday, February 14, 2011

Appellate court’s order does not impact rates–Meralco

business mirror
MONDAY, 14 FEBRUARY 2011 21:02 PAUL ANTHONY A. ISLA / REPORTER

THE Manila Electric Co. (Meralco) on Monday allayed fears of consumers on the impact of the Court of Appeals’ (CA) injunction on its rates.
In a statement, the country’s largest power distributor said the appellate court’s injunction has no impact on its rates and that it did not invalidate the agreement it entered into with the National Power Corp. (Napocor).
Meralco also made it clear that the injunction indefinitely puts on hold the agreement that would allow Meralco to pass on to its consumers the P14.3 billion it owes Napocor.
It explained that what the CA did was to temporarily halt the proceedings at the Pasig City RTC. It will be recalled that a petition was filed by Meralco with the Regional Trial Court (RTC) in Pasig City to seek the court’s declaration that the settlement agreement, independent of the pass-through provision—which is reserved for approval by the ERC—is valid and binding.
Both the Office of the Solicitor General and Meralco were given 30 days to submit their positions on the matter.
The power distributor said the CA is expected to resolve whether to grant the OSG’s petition to revert the issue to arbitration.
It added that the injunction issued by the CA could not have prevented Meralco “from imposing extra charges on its customers in order to pay its P14.3-billion liability with Napocor” since it was not the subject matter of the proceedings before the Court of Appeals or the RTC.
Meralco explained that the injunction was only intended to restrain the RTC from conducting further proceedings pending resolution of the OSG petition before CA, so as not to render the same moot and academic.
It emphasized that the settlement agreement is valid and binding, and Meralco signed it to protect its customers from additional costs since it only paid Napocor for electricity that was actually consumed.
The issue of the pass-through of any amount under the settlement agreement is still within the regulatory authority of the Energy Regulatory Commission and outside the RTC’s jurisdiction.
In the meantime, however, the ERC has suspended the proceedings on this matter pending the resolution by the RTC of the validity of the settlement agreement.
The power distributor added that the decision to pass through any amount should still be subject to ERC approval.
Meralco explained that the temporary restraining order  (TRO) earlier issued by the CA was not intended to prevent the RTC from enforcing the alleged order or decision affirming the validity of the settlement agreement, since the RTC never issued any such order or decision.
The TRO merely suspended the proceedings at the RTC for a period of 60 days, which expired on February 1, 2011, while the injunction only effectively extended the TRO until the CA is able to decide on the case.
Meralco assured its customers that the injunction does not in any way affect its delivery of electric service.

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