Stop generating companies’ charges, penalties–groups

Business Mirror

13 Jan 2014 

 

Written by Joel R. San Juan

PARTY-LIST groups led by Bayan Muna on Monday asked the Supreme Court to issue a temporary restraining order (TRO) enjoining power generation companies from imposing or collecting generation charges and penalties from Manila Electric Co.(Meralco) pending the resolution of the petitions seeking to nullify its P4.15 per kilowatt-hour (kWh) staggered power-rate increase.

In a 39-page amended petition, Bayan Muna and its co-petitioners complied with the Court’s earlier directive to amend their petition to include as respondents several power suppliers and generation companies in light of their allegation of possible collusion among the said power players in order to jack up power rates. 

The petitioners claimed that the high power-rate increase is due to the very high generation charge “resulting from acts of collusion” by respondent gencos.

They noted that these gencos have 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 December 23 enjoining the  Energy Regulatory Commission (ERC) and Meralco from imposing  the “provisionally approved” rate increase.

“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 gencos on Meralco for the payment of the generation charge is actually a threat and pressure to petitioners and the public. 

“Should respondent Meralco give in to these genco’s payment demands, it is the petitioners and the public who will suffer grave and irreparable injury because said imposition will merely be passed through to the public. Respondents gencos must, therefore, be enjoined from imposing or exacting payment for its unjust and unlawful generation charge,” they added. 

Meralco earlier warned of a rotating blakcouts if the Court will not lift the TRO. 

The power company noted that since the TRO was issued, it has been obliged to pay generation, transmission and other pass-through charges only to the extent of what it has been ordered to temporarily bill and collect from its customers.

If the current setup will continue, Meralco said it will face great risk of not being able to purchase all the electricity needed for the succeeding months.

“The generation companies may then eventually stop supplying eletricity 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.

In fact, Meralco disclosed that it has already received demand letters from transmission and generation companies for the full payment of their November 23 power bills.

The Court is poised to dig deeper into the alleged collusion between the ERC and power producers and suppliers that led to a P4.15 per kWh power-rate increase by Meralco.

Such action from the Court became imminent after it ordered the petitioners seeking to nullify said increase to amend their petitions to implead the Philippine Electricity Market Corp. (PEMC), operator of electricity trading flood Wholesale Electricity Spot Market (WESM) as respondents in the case.

Also ordered to be impleaded as power suppliers SEM-Calaca Power Corp., Masinloc Power Partners Corp., Therma Luzon Inc., San Miguel Energy Corp., South Premier Power Corp. and Therma Mobile Inc. as necessary parties in the case. 

The Court noted that based on public records the power suppliers have existing power supply agreements with Meralco and supplied the latter with power during November 2013 when the generation costs increased. 

Likewise, the Court pointed out that the PEMC should be impleaded 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 sport market.”

The said directive was followed by another resolution issued by the Court that granted the plea of Meralco to implead as respondents’ power transmission and generation companies in the case. 

The additional respondents were named as the PEMC, operator of electricity trading flood WESM, and transmission firm National Grid Corp. of the Philippines (NGCP).

Aside from the PEMC and the NGCP, the Court agreed to name as respondents First Gas Power Corp., South Premiere Power Corp., San Miguel Energy Corp., Masinloc Power Partners Co. Ltd., Quezon Power (Philippines) 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.   source