(The Philippine Star) | Updated February 6, 2014 - 12:00am
MANILA, Philippines - Lifting the Supreme Court temporary restraining order (TRO) on the plan of the Manila Electric Co. (Meralco) to raise electricity rates by more than P4 per kilowatt-hour is unacceptable to Malacañang.
“The proposed petition for the lifting of the TRO is not consistent with the public interest,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said, emphasizing that the government “believes that unjustifiable price hikes should not be passed on to the people.”
“The electric power industry is imbued with public interest. Public interest dictates that electric service be provided continuously and without unjustified interruption,” he said.
He reiterated President Aquino’s pronouncements three weeks ago that it’s the mandate of the government to ensure only reasonable profits for public service-oriented businesses, in accordance with the General Welfare provision or Article 2 Section 5 of the 1987 Constitution.
“The President believes in enforcing the provision of the EPIRA on possible disgorgement of profits if current investigations by the DOE and the DOJ will establish that there has been collusion among the industry players,” Coloma warned, referring to the Electric Power Industry Reform Act.
“I think it is incumbent that, inasmuch as this situation greatly affects the welfare of so many of our countrymen, we should know what actually transpired and what corrective action should be undertaken to address that situation,” Coloma quoted Aquino as saying.
“As the President has pointed out, the trigger for the significant power rate increase that is now at issue in the SC was a foreseeable event for which Meralco and other industry players should have prepared,” Coloma added.
“Established companies” like decades-old Meralco and other power firms, he said, have always professed fidelity to corporate social responsibility.
“That is why we have repeatedly said that the electric power industry is imbued with public interest and that public interest dictates that electric service be provided continuously and without unjustified interruption,” he explained.
He stressed the government is determined to ensure uninterrupted power supply in the face of Meralco’s warning of massive rotating blackouts if it is not allowed to pursue its plan to raise its rates.
He also made it clear that the government would not tolerate “unjustifiable price hikes.”
“Let’s just say that the government is fully prepared to do whatever action is necessary at the proper time, if only to ensure that the interests of the public are fully protected,” he pointed out.
He also stressed the government is just as determined to crack the whip on other non-power utilities.
Water concessionaires Maynilad Water Services and Manila Water Co. were told to account in mid-2011 for decades of allegedly overcharging water rates.
“This is a parallel example of unjustifiable increases. This is not the first time,” Coloma recalled, urging public utilities in general to stick to their commitment to corporate social responsibility.
‘Half-truth’
For Sen. Sergio Osmeña III, chairman of the Senate committee on energy, the scenario raised by Meralco was “half-truth.”
“We do not have access to the books of gencos (generation companies). But March, April and May are historically the months when we have the thinnest reserves,” Osmeña said.
He said he does not expect blackouts in the Luzon grid even during the summer season “if the concerned agencies do their jobs well.”
Party-list group Bayan Muna also dismissed Meralco’s warning of massive rotating blackouts.
“People will not accept this unconscionable increase. They will also not accept brownouts,” Rep. Neri Colmenares told a news conference.
It was upon Bayan Muna’s petition that the SC issued a 60-day TRO on the planned rate hike.
Colmenares reminded Meralco and its power producer-suppliers that there is a constitutional provision allowing government takeover of public utilities and other facilities imbued with public interest in case of an emergency.
He said calls for President Aquino to consider such option would mount once power outages start.
He said the administration would not be able to ignore nationwide calls for the government’s exercise of such power to protect public interest.
He also said Meralco has itself to blame for the unprecedented rate increase.
“Meralco admitted that it instructed its supplier, Therma Mobile, to offer a price of P62 in the spot market, which price was accepted. It was accepted not only once but 25 times, causing spot market prices to shoot up,” he added.
He pointed out that Meralco obviously made a mistake of asking its supplier to offer its electricity in the spot market at the P62 price cap.
“But they should have corrected the error and stopped their supplier from further making an offer. They made mistakes 25 times, for which they want the public to suffer. They should absorb the cost of their own mistakes,” he stressed.
ERC clarification
Meanwhile, Meralco said it would seek clarification from the Energy Regulatory Commission (ERC) whether it can implement the higher generation charge for January of P10.23 per kwh.
Meralco pegged its January generation charge at P5.67 per kwh in deference to the SC TRO.
Alfredo Panlilio, Meralco senior vice president and head of Customer Retail Services, Corporate Marketing and Communications, said they would have to clarify the matter with the ERC since Meralco’s TRO only covers the December 2013 generation charge.
“My understanding is we will have a manifestation to clarify with the SC. Plus, any January billing will have to be cleared with and approved by the ERC,” he said. “My understanding of it is we will have to file an urgent motion to do so.”
Panlilio added that Meralco may submit its manifestations to the ERC and the SC within the week.
He noted that generation companies continue to issue demand letters.
“We will go through the process. Don’t forget that the gencos are issuing demand letters already,” Panlilio said.
Meralco is seeking the clarification in response to the comment made by Chief Justice Maria Lourdes Sereno during the oral arguments at the SC on Tuesday that the 60-day TRO issued on Dec. 23 does not cover the January generation charge.
Panlilio said a staggered collection scheme remains an option for the January generation charge, considering that Meralco’s December generation charge rose to P9.10 per kwh or a record increase of P3.44 per kwh following the month-long maintenance shutdown of the Malampaya deep water gas to power project, which supplies natural gas to three power plants in Luzon.
The power plant operators had to tap the more expensive liquid fuel.
Aside from the Malampaya shutdown, electricity prices at the Wholesale Electricity Spot Market (WESM) also increased because of tight supply as a result of unplanned outages of some power plants.
The Supreme Court is currently conducting oral arguments on the power rate hike issue, with the next hearing slated on Feb. 11. With Iris Gonzales, Jess Diaz, Christina Mendez source
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