TRO on Meralco power-rate hike bid extended for 60 days

Business Mirror

18 Feb 2014 

 

Written by Joel R. San Juan

THE Supreme Court (SC) on Tuesday granted an extended temporary restraining order (TRO) it issued last December 23, enjoining the Manila Electric Co. (Meralco) and the Energy Regulatory Commission (ERC) from enforcing the approved P4.15 per kilowatt-hour power-rate increase.

At a news briefing, SC Spokesman Theodore Te said the 15-man High Tribunal agreed to extend the TRO to another 60 days or until April 22. Last December 23 the Court issued a 60-day TRO which is set to lapse on February 23.

Aside from extending the TRO on the implementation of the power-rate hike, the Court also issued a TRO enjoining the generation companies (gencos) and power suppliers from demanding and collecting generation charges from Meralco, which the latter failed to pay after the Court stopped its P4.15 power hike.

Te said the TRO would remain in effect until the prescribed period and would cover gencos, such as Masinloc Power Partners Co. Ltd., AES Philippines, San Miguel Energy Corp., South Premiere Power Corp., First Gas Power Corp. and the National Grid Corp. of the Philippines.

Also covered by the TRO is the Philippine Electricity Market Corp.

The TRO was issued based on the motion filed by the petitioners that include Party-list Reps. Neri Colmenares and Isagani Zarate of Bayan Muna; Luz Ilagan and Emmi de Jesus of Gabriela, Antonio Tinio of ACT Teachers Rep.  and Terry Ridon of Kabataan.

The petitioners earlier warned that if the TRO on the rate increase is lifted, its immediate impact would be on inflation as the rate hike will add billions to production cost of manufacturers which, in turn, would push up the prices of goods and services.

They also accused Meralco and respondent gencos  of conspiring to pressure the Court to lift the TRO.

They noted that during the oral argument before the SC on February 4, Meralco, through its legal counsel, warned of power outages if it fails to collect the generation costs from the customers which it owes respondents gencos.

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 set-up 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 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 disclosed that it has already received demand letters from transmission and generation companies for the full payment of their November 23 power bills.

On the other hand, the petitioners said gencos continue to threaten Meralco with very high penalties, interest rates and legal actions for the delay in the payment of the generation costs that the latter has not paid them on the basis of the TRO.

In a letter dated December 5, Meralco informed respondent ERC that the total cost of generation to be passed on to its almost 5 million captive customers amounted to P22.64 billion, equivalent to a generation charge for December 2013 billing of P9.1070 per kWh.

This will result to an increase of P4.15 per kWh for residential customers, according to the power firm.

The power firm attributed the abrupt increase in the generation cost to  supposed maintenance shutdown of the Malampaya facility that supplies natural gas to three  major power plants—Ilijan, San Lorenzo and Santa Rita—which supply an aggregate capacity of 2700-megawatt (MW) electricity to its franchise area.

It also said the shutdown of Malampaya coincided with the scheduled maintenance of two other plants, Pagbilao 2 and Sual 1, which also collectively contribute over 950 MW to its requirements.

Meralco said because of the events, it was forced to buy power at higher rates from the Wholesale Electricity Spot Market.

On December 9, 2013, respondent ERC approved Meralco’s request for a rate hike.

Not enough

Party-list lawmakers on Tuesday said the SC’s extension of TRO on power-rate hike is not enough to address the power problem in the country.

Gabriela Women’s Party Reps. Luzviminda Ilagan and Emmi de Jesus said the extended TRO will not stop them from demanding the repeal of Electric Power Industry Reform Act of 2001 (Epira).

“Even as the Supreme Court extended the TRO on power-rate hikes, we will not stop protesting against the power-rate hike and the inutility of the Energy Regulatory Commission and independent private power producers and distributors,” they said.

“Clearly, there is still no assurance of lower electrical charges in our homes. The Electric Power Industry Reform Act of 2001 rendered the ERC toothless in ensuring affordable electrical charges and instead makes consumers vulnerable to electricity overpricing and price manipulation,” Ilagan said.

The legislators blamed Epira as culprit in the power-rate hike.

“It has only benefited private power-related businesses like Meralco, which the law allows to manipulate the price of electricity in the market. Under the law, the government cannot own and operate its own power- generation plants and transmission facilities. Only few individuals from big corporations benefit from this law at the expense of the public consumers,” Ilagan said.   source