By | Jan. 14, 2014 at 12:01am
LAWYERS for petitioners and respondents in the case against the P4.15 per kilowatt-hour rate increase sought by the Manila Electric Co. (Meralco) met for the first time before the Supreme Court Monday during the preliminary conference.
The meeting, presided over by Associate Justice Victor F. Leonen, was aimed at settling key procedural and substantial issues that will be debated in oral arguments on Jan. 21.
The guidelines were not immediately released, however.
On Monday, the Court was asked to issue a temporary restraining order enjoining power generation companies from collecting generation charges and penalties from Meralco, pending the resolution of the consolidated petitions against the rate hike.
In an amended petition, Bayan Muna and its co-petitioners complied with the Court’s earlier order to include as respondents several power generation companies, given the allegations that they colluded to jack up electricity prices.
The petitioners said the high power rate adjustment was due to the very high generation charge “resulting from acts of collusion” among the respondent power generation companies.
The companies, the petitioners said, demanded payment from the public through Meralco of their pass through generation charges and also threatened Meralco with high penalties and interest rates for the delay in the payment of the same due to the 60-day TRO issued by the Court on Dec. 23, which stopped Meralco from collecting the higher rates.
“Clearly, since generation charge is an unjustly automatic pass-through charge to the public, the pressure and threats of legal action and high interest penalties by these [generation companies] on Meralco for the payment of the generation charge is actually a threat and pressure to petitioners and the public,” Bayan Muna said.
“Should respondent Meralco give in to these...payment demands, it is the petitioners and the public who will suffer grave and irreparable injury because the said imposition will merely be passed through to the public. Respondents GENCOs must therefore be enjoined from imposing or exacting payment for [their] unjust and unlawful generation charge,” they said.
Meralco earlier warned of rotating blackouts if the Court does not lift the TRO.
Meralco said since the TRO was issued, it has been obliged to pay generation, transmission and other pass-through charges only to the extent allowed by the TRO.
It added that if the current situation continues, Meralco faces a great risk of being unable to buy electricity in the succeeding months.
“The generation companies may then eventually stop supplying electricity to Meralco. The transmission company may stop transmitting if Meralco is unable to pay for the transmission charges. The entire power industry may come to a screeching halt,” Meralco said.
Meralco said it has already received demand letters from the transmission and generation companies for the full payment of their Nov. 23 power bills.
The Court is poised to dig deeper into the alleged collusion between the Energy Regulatory Commission (ERC) and power producers and suppliers that led to a P4.15 per kilowatt-hour power rate increase by Meralco.
The Court ordered the petitioners to include the Philippine Electricity Market Corp. (PEMC), which runs the Wholesale Electricity Spot Market (WESM), and the power generation companies as respondents.
The power suppliers were SEM-Calaca Power Corp., Masinloc Power Partners Corp., Therma Luzon Inc., San Miguel Energy Corp., South Premier Power Corp. and Therma Mobile Inc.
The Court noted that based on public records the power suppliers have existing supply agreements with Meralco and supplied the latter with power in November 2013 when the generation costs increased.
The Court said PEMC should be included as a respondent in the case after the petitioners alleged that “a very high ceiling price was revealed, at P62 per kWh sold at the WESM, while normally the price is way below the average in the spot market.”
The order was followed by another resolution issued by the Court, granting Meralco’s appeal to include the power transmission and generation companies as well.
The National Grid Corp. of the Philippines were included in the case as respondent, as were First Gas Power Corp., South Premiere Power Corp., San Miguel Energy Corp., Masinloc Power Partners Co. Ltd., Quezon Power (Phils.) Ltd. Co., Therma Luzon Inc., Sem-Calaca Power Corp., FGP Corp., 1590 Energy Corp., AP Renewables, Inc., Bac-Man Energy Development Corp./Bac-Man Geothermal, Inc., First Gen Hydro Power Corp., GNPower Mariveles Coal Plant, Ltd. Co., PANASIA Energy Holdings Inc., Power Sector Assets & Liabilities Management Corp., SN Aboitiz Power, Strategic Power Development Corp., Trans-Asia Power Generation Corp. and Vivant Sta. Clara Northern Renewables Generation Corp.
The Palace on Monday skirted the allegations that the administration owed political debts to the power producers, a charge raised by Senator Antonio Trillanes IV, an ally of President Benigno Aquino III.
Presidential Communications Operations Office Secretary Herminio Coloma would not respond directly to the charge and simply said: “The government is not remiss in its duties and will not neglect the interest of the public on this issue.”
“This is the reason why the Department of Energy and the Department of Justice have initiated a probe if there was abuse of market power,” he added.
Trillanes, in a radio interview Monday, said while Aquino appears to be lukewarm in cracking the whip on certain power producers whom he did not name, the President was looking for ways to ease the impact of the power rate hike.
The Commission on Elections said owners and officials of the power companies were not among the list of contributors to the President’s election campaign or to the Liberal Party.
Consumers, who face the highest electricity charges in history, were not the only ones watching the outcome of the case.
Foreign investors, too, were hoping for a speedy outcome, with the American Chamber of Commerce of the Philippines noting the national importance of the case.
“Foreign investors are watching developments carefully and hope all the concerned parties can agree to move in a direction that will minimize power interruptions in the fast-approaching summer period,”
Amcham senior advisor John Forbes said.
Power supply usually tightens during summer due to increased demand and smaller contribution from hydro-electric power plants.
“We are always hopeful that such issues of great importance to the national economy will receive priority attention,” Forbes said.
Philippine Independent Power Producers Association president Luis Miguel Aboitiz earlier said that power generators, especially foreign-owned power suppliers, are keenly awaiting the final decision of the Supreme Court.
Aboitiz said the foreign players have voiced their concerns and are hoping that the issue will be resolved soon.
PIPPA is the association of the country’s power producers, whose members also supply power to Meralco.
Aboitiz said that supply is currently stable for the first two months of the year but April demand goes up due to the onset of summer.
“The consequence is minimal if it’s resolved quickly. Some of the generators with weaker balance sheets may be affected. Some generators have enough... cash to weather it out for 60 days. Others have a different situation...It depends on each generator,” Aboitiz said.
He said power plants serving Meralco will not shutdown but “if they don’t have fuel they may not generate.” With Alena Mae Flores, Macon Ramos-Araneta, Joyce Pangco Panares and Joel Zurbano source
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