'Napocor-Meralco deal will result in power rate hike'

By Edu Punay (The Philippine Star) Updated October 18, 2011 12:00 AM


MANILA, Philippines - The Court of Appeals (CA) ruling upholding the legality of the P14-billion agreement between the National Power Corp. (Napocor) and the Manila Electric Co. (Meralco) will be harmful to consumers who carry the burden of any increase in power rates.


It was on this premise that Associate Justice Japar Dimaampao cast a dissenting vote in the decision of the special division of the appellate court that gave the go-signal for the implementation of the deal, which is expected to cost Meralco costumers an additional 12 centavos per kilowatt-hour over five to six years.


In his nine-page dissenting opinion, Dimaampao favored the bid of the government through the Office of the Solicitor General (OSG) to stop the Pasig City regional trial court from implementing its order affirming the validity of the settlement claim that was forged in 2003 and in further proceeding in connection with Meralco’s civil suit.


Dimaampao penned last February a resolution, which issued a writ of preliminary injunction, indefinitely enjoining the implementation of the settlement.


Dimaampao said in his dissent that “with all due respect, the thesis taken by the majority is fallacious. In a word, I cannot turn a blind eye to the manifest glitch in the majority ruling.


He said the other four justices who voted otherwise – presiding Justice Andres Reyes Jr., Associate Justices Jane Aurora Lantion, Agnes Reyes-Carpio and Michael Elbinias – “deprived our people of their right to probe into the burdensome pass-through provision.”


The pass-through provision allows Meralco to pay Napocor the net settlement amount from collections recovered from its customers once approved by the Energy Regulatory Commission (ERC).


“The people stand defenseless against the inauspicious consequences ensuing from the agreement. Why should we allow Meralco to pass on the buck to us? Why should we be made to pay the horrendous obligation of Meralco? These are questions that will be left unanswered because the majority lamentably refused to allow the parties to undergo arbitration. My voice alone echoes in the wilderness,” he said.


Citing its power to grant an application for the issuance of a preliminary injunction even without conducting a hearing, the CA earlier issued the writ.


Records showed that on Dec. 1, 2010, the CA issued a 60-day temporary restraining order against the proposed settlement that is expected to cost consumers in Metro Manila and nearby areas an additional 12 centavos per kilowatt-hour over five to six years.


The case arose when Meralco failed to fully take out its contracted power purchases from Napocor from 2003 to 2004.


Based on the agreement, Meralco was supposed to buy 3,600 megawatts from Napocor during the duration of the contract.


In 2010, the lower court declared valid the Meralco-Napocor agreement, except the pass-through provision, which is still subject to approval of the ERC. – With Donnabelle Gatdula