Business World Online
Posted on February 05, 2014 11:33:10 PM
MALACAÑANG is against the lifting of a temporary restraining order (TRO) holding back a record Manila Electric Co. (Meralco) rate hike, saying it would be against the public interest.
Consumer welfare protection, Sec. Herminio B. Coloma, Jr. of the Presidential Communications Operations Office yesterday said, could extend to ordering power industry players to divest profits if proven guilty of collusion.
“Most importantly, government believes that unjustifiable price hikes should not be passed on to the people. Therefore, the proposed petition for the lifting of the TRO is not consistent with the public interest,” Mr. Coloma said in a briefing.
Meralco and other industry players, he claimed, could have prepared for the maintenance shutdowns said to be the main reason behind the plan to raise power rates by P4.15 per kilowatt-hour (kWh).
The increase, set to be gradually implemented starting last December, was halted by the Supreme Court following a petition by party-list legislators and consumer groups. They claim that power firms colluded to raise rates and are challenging the automatic adjustments allowed by law.
“As the President (Benigno S. C. Aquino III) has pointed out, the trigger for the significant power rate increase that is now at issue in the Supreme Court was a foreseeable event for which Meralco and other industry players should have prepared,” Mr. Coloma said.
“The President also believes in enforcing the provision of the EPIRA (Electric Power Industry Reform Act of 2001) on possible disgorgement of profits if current investigations by the DoE (Department of Energy) and the DoJ (Department of Justice) will establish that there has been collusion among the industry players.”
Section 45 of the EPIRA disallows anti-competitive behavior, tasking the Energy Regulatory Commission (ERC) to monitor the industry and impose sanctions.
“Upon finding that a market participant has engaged in such act or behavior, the ERC shall stop and redress the same. Such remedies shall, without limitation, include the imposition of price controls, issuance of injunctions, requirement of divestment or disgorgement of excess profits and imposition of fines and penalties pursuant to this Act,” it states.
Asked to comment, Meralco Senior Vice-President Alfredo S. Panlilio yesterday denied allegations of collusion raised by opponents of the power rate hike.
“We share the same belief with the Office of the President that applicable provisions of law be applied if collusion among industry players is actually proven after due process had been observed,” Mr. Panlilio said.
“Meralco maintains its position that it is not involved in any such alleged collusion and that it had faithfully complied with existing rules and regulations and observed utmost due diligence and good faith in delivering electric service to its customers.”
The Supreme Court has so far held two hearings on the case, with oral arguments to continue on Feb. 11 with the ERC and DoE stating their positions on the rate hike.
The Energy and Justice departments are pursuing parallel investigations, Mr. Coloma said.
“We want an objective and impartial determination of the facts, so that the proper conclusions may be reached and that these conclusions will serve the public interest,” he said.
The impact of supply disruptions have extended beyond the P4.15/kWh rate hike, with Meralco claiming that a heftier P4.56/kWh increase should have been charged in January.
Meralco on Tuesday told the Supreme Court that disallowing the P4.15/kWh rate hike would have a substantial economic impact. “Dire consequences ... 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,” its lawyer claimed.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Claire-Ann Marie C. Feliciano with inputs from Maria Laura V. Angeles source
Business World Online
Posted on February 05, 2014 11:33:10 PM
MALACAÑANG is against the lifting of a temporary restraining order (TRO) holding back a record Manila Electric Co. (Meralco) rate hike, saying it would be against the public interest.
“Most importantly, government believes that unjustifiable price hikes should not be passed on to the people. Therefore, the proposed petition for the lifting of the TRO is not consistent with the public interest,” Mr. Coloma said in a briefing.
Meralco and other industry players, he claimed, could have prepared for the maintenance shutdowns said to be the main reason behind the plan to raise power rates by P4.15 per kilowatt-hour (kWh).
The increase, set to be gradually implemented starting last December, was halted by the Supreme Court following a petition by party-list legislators and consumer groups. They claim that power firms colluded to raise rates and are challenging the automatic adjustments allowed by law.
“As the President (Benigno S. C. Aquino III) has pointed out, the trigger for the significant power rate increase that is now at issue in the Supreme Court was a foreseeable event for which Meralco and other industry players should have prepared,” Mr. Coloma said.
“The President also believes in enforcing the provision of the EPIRA (Electric Power Industry Reform Act of 2001) on possible disgorgement of profits if current investigations by the DoE (Department of Energy) and the DoJ (Department of Justice) will establish that there has been collusion among the industry players.”
Section 45 of the EPIRA disallows anti-competitive behavior, tasking the Energy Regulatory Commission (ERC) to monitor the industry and impose sanctions.
“Upon finding that a market participant has engaged in such act or behavior, the ERC shall stop and redress the same. Such remedies shall, without limitation, include the imposition of price controls, issuance of injunctions, requirement of divestment or disgorgement of excess profits and imposition of fines and penalties pursuant to this Act,” it states.
Asked to comment, Meralco Senior Vice-President Alfredo S. Panlilio yesterday denied allegations of collusion raised by opponents of the power rate hike.
“We share the same belief with the Office of the President that applicable provisions of law be applied if collusion among industry players is actually proven after due process had been observed,” Mr. Panlilio said.
“Meralco maintains its position that it is not involved in any such alleged collusion and that it had faithfully complied with existing rules and regulations and observed utmost due diligence and good faith in delivering electric service to its customers.”
The Supreme Court has so far held two hearings on the case, with oral arguments to continue on Feb. 11 with the ERC and DoE stating their positions on the rate hike.
The Energy and Justice departments are pursuing parallel investigations, Mr. Coloma said.
“We want an objective and impartial determination of the facts, so that the proper conclusions may be reached and that these conclusions will serve the public interest,” he said.
The impact of supply disruptions have extended beyond the P4.15/kWh rate hike, with Meralco claiming that a heftier P4.56/kWh increase should have been charged in January.
Meralco on Tuesday told the Supreme Court that disallowing the P4.15/kWh rate hike would have a substantial economic impact. “Dire consequences ... 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,” its lawyer claimed.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Claire-Ann Marie C. Feliciano with inputs from Maria Laura V. Angeles source
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