January 18, 2019 | 12:05 am
THE Energy Regulatory Commission
(ERC) has ordered Manila Electric Co. (Meralco) and GNPower Ltd. Co. to cease
and desist from “assessing, billing and collecting” from Batangas Paper Corp.
(BPC) any distribution wheeling charges until their dispute is resolved.
“It is evident that an invasion of a
right, which is material and substantial, is being continually inflicted upon
the business interest of BPC,” the ERC said in its order dated Dec. 5, 2018 and
docketed earlier this week.
It said the case “warrants for an
urgent and paramount necessity” for the ERC to issue a relief to prevent
serious damage against BPC, thus a halt to Meralco’s distribution wheeling
charges “is therefore paramount.”
The case stemmed from a complaint
filed by BPC against GNPower and Meralco for the refund of P12,171,764.50 plus
legal interest, representing what it alleged as “unauthorized and illegal”
assessment and collection of the distribution utility’s wheeling charges.
Meralco has the exclusive franchise
to operate a distribution system in the location where BPC operates and
maintains its paper factory in Sto. Tomas, Batangas.
GNPower is a retail electricity
supplier (RES) that exclusively provides all of BPC’s power needs through a
“master power purchase sale agreement.”
The paper company is a contestable
customer as certified by the ERC and is allowed to source its electricity
directly from a RES.
BPC said that beginning March 26,
2017, it had received a total of seven separate billing statements from GNPower
amounting to $1,301,518.64 or P30,652,694.06 for the wheeling charges.
Based on an initial inquiry, BPC was
told by GNPower that the charges were for the use of Meralco’s supposed
ownership of the sub-transmission lines through which the electricity being
provided by the RES passes.
However, BPC said it had discovered
“much to its surprise and dismay” that Meralco is, “in truth and in fact, not
the real and/or the bonafide owner” of the lines for which it was collecting
the distribution utility wheeling charges.
Before filing the case, the paper
company exerted effort to stop or preclude Meralco from assessing the “baseless
and unwarranted” charges, as well as to convince the distribution utility to
return what was collected.
“[B]ut all such effort have come to
naught, hence, the filing of the instant complaint,” it said.
The ERC said there is substantial
evidence for the issuance of a cease and desist order.
It noted that as a retail
electricity supplier, GNPower is responsible for all contractual, service and
billing matters related to its contestable customers. The obligation includes
those pertaining to distribution wheeling services that will be provided by the
distribution utility operating within the location of the customer.
The commission said that based on
its record, BPC is directly connected to the 9.72-kilometer segment of the
38.72 kilometer sub-transmission line, which is currently owned, operated and
managed by the National Grid Corporation of the Philippines.
It said almost the entire length of
the sub-transmission line is located within the franchise areas of both Meralco
and Batangas II Electric Cooperative, Inc.
Records also showed that Meralco has
a pending application with the commission for the approval of its acquisition
of the subject sub-transmission line where BPC is connected.
To date, the commission has not yet
issued its resolution on the application filed by Meralco and the electric
cooperative, thus both are in no position to acquire and operate the
sub-transmission line, the ERC said.
The ERC said the allegations
presented by Meralco “lost sight of the fact that [it] can only legally impose
the [distribution utility wheeling charge]” on BPC as a contestable customer
“if and only if it has assumed ownership of the sub-transmission assets.” — Victor
V. Saulon
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