Tuesday, April 22, 2014

Power rate hike TRO indefinitely extended

Business World Online
Posted on April 22, 2014 10:26:44 PM
By Claire-Ann C. Feliciano, Senior Reporter

THE SUPREME COURT yesterday issued a fresh restraining order against the controversial Manila Electric Co. (Meralco) power rate hike, indefinitely halting the implementation of adjustments supposed to have taken effect last December.

In a 10-4 vote, justices meeting in Baguio City “issued a TRO (temporary restraining order) effective immediately until further orders,” spokesperson Theodore O. Te told reporters in a briefing.

The high court has yet to rule on a P4.15 per-kilowatt-hour (kWh) increase that Meralco wanted to implement in stages starting last December.

A 60-day TRO was initially issued that month following a lawsuit filed by party-list legislators and consumer groups. The court following this up in February with another stay order that expired yesterday.

Generating companies, National Grid Corporation of the Philippines (NGCP) and Wholesale Electricity Spot Market (WESM) operator Philippine Electricity Market Corp. (PEMC) continued to be prevented “from demanding and collecting the deferred amounts [from Meralco].”

The other firms were identified as Masinloc Power Partners Company, Ltd. through AES Philippines, San Miguel Energy Corp., South Premiere Power Corp. and First Gas Power Corp.

Meralco, for its part, said the company would comply with the high court’s directive.

“We respect the order ... and will continue to await its decision on the case,” said Larry S. Fernandez, Meralco senior assistant vice-president and utility economics head.

The indefinite halt to the power rate hike, he said, would not affect Meralco’s bottom line.

“The matter involves generation costs, which distribution utilities like Meralco are mandated to pass through and reflect in consumers’ billings in accordance with relevant rules. Pass-through charges have no direct impact on earnings and income of distribution utilities,” he said.

PEMC, NGCP, and First Gas parent firm First Gen Corp. also said they would comply.

“NGCP will surely abide by laws and rules governing its operations,” the grid operator said in a statement.

While PEMC acknowledged that the extension of the TRO could affect the finances of some generating companies, President Melinda L. Ocampo said they would nonetheless “comply because that’s an order from the high court.”

Energy Secretary Carlos Jericho L. Petilla, for his part, said: “We respect the decision of the Supreme Court but we are also hoping that a decision will eventually be issued so that we can concentrate on moving forward.”

Palace spokesman Edwin S. Lacierda echoed this, saying: “while we wait for the final decision on the case, an extension of the TRO would certainly provide comfort to our countrymen especially at this time (summer) when there is more consumption.”

Energy Regulatory Commission Executive Director Francis Saturnino C. Juan said the regulator wanted to secure a copy of the order “to know if there is anything the ERC will have to do ... if none, the ERC will just await further orders from the court. In the meantime, the status quo on rates will be observed.”

Ahead of the decision, the ERC has already voided market prices for the November and December supply months and ordered PEMC to adopt regulated rates and rebill Meralco.

High WESM prices were the main reason behind the P4.15/kWh rate hike, plus an even higher P5.33/kWh increase for January, sought by Meralco.

The distribution utility has since cut the proposed January adjustment to P0.45/kWh after PEMC revised WESM prices for the December supply month. Meralco has yet to be billed for electricity contracted in November given the pending Supreme Court case.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. source

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