By | Feb. 05, 2014 at 12:01am
MANILA Electric Co. on Tuesday appealed to the Supreme Court to lift its temporary restraining order on a P4.15 per- kilowatt-hour increase in its power rates, warning again that its prolonged inability to collect the higher charges would bring rotating blackouts in Metro Manila.
During oral arguments, lawyers for Meralco led by Victor Lazatin and retired Supreme Court Justice Florentino Feliciano denied allegations that the country’s largest power distributor was responsible for the spike in the price of electricity, and said it acted merely as a collecting agent of the “pass-through” charges mandated by laws.
Lazatin told the court that the distribution utility would not gain a single centavo from the higher pass-on charges attributed to the overlapping shutdown of Malampaya and other generation plants that forced it to buy more expensive power from the Wholesale Electricity Spot Market.
Chief Justice Maria Lourdes
Sereno (top) listens to lawyers
of Manila Electric Company
(middle photo), led by her
mentor, former SC associate
justice Florentino Feliciano
(in light shirt) and Victor Lazatin,
as protesters ask the court
for relief from the fees charged
by the power distributor.
SONNY ESPIRITU
“Meralco is not responsible and has no control over the shutdowns of generation plants. Meralco merely applied existing valid law and regulations in billing and collecting these pass-through charges,” Lazatin said.
In fact, the power distributor even took measures to mitigate the impact of the increased charges on its consumers, the lawyer added.
“Meralco’s proposal to stagger the increase was to cushion the rate impact on its customers, with no benefit to itself. The petitioners have focused only on the aspect of affordability of price; this must
be balanced with quality, reliability and security of electric power and permit the supply chain to work,” he said.
Lazatin said Meralco was surprised to find itself in the “vortex of the controversy” when petitioners did not question its distribution charge, which has not changed. He said the legal controversy is only between the petitioners and the generation companies.
Lazatin warned that if the TRO stays in effect for a longer period, generation companies would eventually stop delivering power.
In the summer months, “the impact of the shortage of supply on every consumer on the grid is going to be extensive, unquantifiable and irreparable,” the lawyer warned.
“Dire consequences to the economy will be brought about by rotating blackouts, not to mention the likely loss of investors’ confidence due to perceived instability of our laws and regulatory rules,” he said.
Lazatin said the TRO should be lifted because petitioners failed to show that Meralco had violated their right to due process or that it would case “grave and irreparable injury” to them.
The TRO issued on Dec. 23 is set to lapse on Feb. 23.
Petitioners questioning the legality of Meralco’s rate hike want it extended until the Supreme Court rules on the case.
Feliciano supported Lazatin’s argument, saying the petitioners failed to cite any constitutional provisions violated by Meralco.
He added that the plea to nullify provisions of the Electric Power Industry Reform Act (EPIRA) law was “purely hypothetical,” making it simply a petition for declaratory relief.
Meralco said the automatic adjustment mechanism that it used to raise power rates without a public hearing complied with the requirements of due process.
Meralco also opposed the prayer of petitioners to refund the rate adjustments, calling “baseless, legally infirm and contrary to the doctrine of operative fact.”
The firm said it merely collected the generation charge and other pass-through charges for the relevant power firms as well as for the national and local governments.
Justice Jose Perez said the “problem lies in the WESM rules,” suggesting a market failure that
resulted in a record high increase in the cost of electricity.
Senior Associate Justice Antonio Carpio questioned Meralco’s purchase of power at P62 per kilowatt-hour from WESM.
But Lazatin explained: “As a buyer of power, you just say the quantity that you want. You are just a price-taker. Whatever the price is, you take it.”
Meralco said petitioners also failed to prove their allegation that it colluded with the power firms to jack up the rates.
Meralco also argued that the petitioners failed to exhaust all administrative remedies before taking their case to the Supreme Court.
Oral arguments began Jan. 21 with petitioners Bayan Muna and the consumer group National Association of Electricity Consumers for Reforms presenting their case.
They will continue Feb. 11 with the Department of Energy and Energy Regulatory Commission (ERC) taking their turn to explain government’s side.
The Palace on Tuesday said it will ask ERC chairperson Zenaida Ducut to submit her common on the administrative case filed against her by the Akbayan party-list group for approving Meralco’s record-high P8 per kilowatt-hour rate hike.
“She will receive the order within the week. We will ask her to comment on the case,” Deputy Executive Secretary Michael Aguinaldo told Manila Standard in an interview.
“After she submits her comment, we will check if further action will be necessary, in which case she will be asked to submit a formal counter-affidavit,” Aguinaldo said.
The Investigative and Adjudicatory Division of the deputy executive secretary for legal affairs has already taken cognizance of the case filed by the Akbayan party-list group, an ally of the administration.
The militant group has also asked the Palace to either fire Ducut or put her under preventive suspension.
Akbayan Rep. Walden Bello said Ducut was “guilty of gross neglect of duty and incompetence by tacitly approving without the barest hint of due process Meralco’s unprecedented power rate hike.”
Bello said Ducut failed to give due notice to the public on the rate hike, the highest since the Electric Power Industry Reform Act took effect.
“Her failure is stupefying considering that the increase in Meralco’s generation charge for the month of November 2013 was the largest under the regulatory regime implemented by the Epira and administered by the ERC,” Bello said.
He said Ducut also committed gross neglect of duty when the ERC approved Meralco’s power supply agreements with generation companies, even if these did not provide for replacement power in the event of scheduled or forced outages of power plants.
“Under Ducut’s watch, the ERC did not require power suppliers to supply Meralco with replacement capacity and electrical output. This is a clear evidence of negligence that violates one of the fundamental policies embodied in the Epira: to ensure the quality, reliability, security and affordability of the supply of electric power,” Bello said.
Under Section 46 of the Revised Rules on Administrative Cases in the Civil Services, gross neglect of duty is punishable by dismissal from the service.
Ducut earlier appealed for understanding, saying the ERC will need at least two months to complete its probe on the alleged collusion and market abuse by power producers, which may have led to the spike in elec-tricity rates.
“The ERC-Investigating Unit is doing its best to come up with an impartial and comprehensive investigation report,” Ducut said, adding that “thousands of hours of trading intervals and price offers” need to be examined thoroughly.
House Speaker Feliciano Belmonte Jr. earlier urged Ducut to consider resigning voluntarily amid allegations that she had been remiss in her duties.
Ducut was a congressional representative of Pampanga’s second district from 1995 to 2004. With Joyce P. Pañares source
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