SC stops Meralco power rate hike anew

By Vincent Cabreza and Jhoanna Marie Buenaobra and Riza T. Olchondra in Manila
Inquirer Northern Luzon, Philippine Daily Inquirer
7:49 am | Wednesday, April 23rd, 2014

BAGUIO CITY—The Supreme Court, sitting en banc on Tuesday, issued a new temporary restraining order that prevented Manila Electric Co. (Meralco) from collecting increased power charges, h ours before the 60-day TRO that it issued in February lapsed.
Voting 10-4 with one abstention, the high court issued the order although it retained the substance of the previous TRO, said lawyer Theodore Te, spokesperson of the tribunal.
The order prevented Meralco from enforcing a P4.15 per kilowatt-hour (kWh) rate increase in its generation charge that it was supposed to collect by stages starting December last year.
It replaced a 60-day TRO that took effect on Dec. 23 and which was extended in February, Te said.
“Well, it is the same [TRO in substance]… [but] because there was a separate vote, it is not an extension, it is a new TRO… I am told it is of the same tenor,” Te told reporters here.
The TRO effectively orders Meralco to hold off collecting the proposed P3.44 per kWh increase in power generation charges last December, which results in an all-in power rate increase of P4.15 per kWh.
The TRO also enjoins the Energy Regulatory Commission (ERC) against implementing its order last December allowing Meralco to stagger the collection of the proposed increase.
Malacañang welcomed the Supreme Court’s decision. “That’s certainly something that we will welcome considering that this is now summertime, and there’s an increased demand in power consumption,” presidential spokesperson Edwin Lacierda told reporters.
“So the extension of the TRO will definitely be something that will be welcomed by our countrymen.”
Chief Justice Maria Lourdes Sereno and Associate Justices Antonio Carpio, Presbitero Velasco, Teresita Leonardo-de Castro, Mariano del Castillo, Martin Villarama Jr., Jose Perez, Jose Mendoza, Bienvenido Reyes and Marvic Leonen voted for a new TRO.
Associate Justices Arturo Brion, Roberto Abad, Diosdado Peralta and Lucas Bersamin dissented.
Associate Justice Estela Perlas-Bernabe inhibited from voting on the consolidated petitions of various groups, among them the Makabayan bloc in Congress led by Bayan Muna Representatives Neri Javier Colmenares and Carlos Isagani Zarate.
The high court is winding up its annual summer sessions in Baguio City this week.

Alleged collusion
The petitioners have asked the high court to stop the rate increase, arguing that high power generation charges that led to the hike resulted from collusion among Meralco, its electricity suppliers and the ERC.
The rate increase stemmed from the shutdown of the Malampaya gas pipeline for maintenance from Nov. 11 to Dec. 10 last year.
A number of power generation plants also shut down during the period, creating a 45-percent shortfall in the average 6,000 megawatts that Meralco supplies to customers.
The shortfall forced Meralco to buy a more expensive supply from the WESM and to pass on the cost to customers.
The shutdown of the pipeline also prompted plants that use the cheaper natural gas from Malampaya and supply power to Meralco to use more expensive fuel.
Meralco merely passes on to its consumers the increased cost of electricity supplied by the generation companies, the Supreme Court said.
So like the previous restraining order, the new TRO stopped these firms from charging high rates for the power they sold to Meralco.
As for power producers and the operator of the Wholesale Electricity Spot Market (WESM), where unusual price surges pushed power rates up, the new TRO said:
“Enjoining the generating companies, specifically Masinloc Power Partners Co. Ltd., c/o AES Philippines, San Miguel Energy Corp., South Premiere Power Corp., First Gas Power Corp. and National Grid Corp. of the Philippines from demanding and collecting the deferred amounts representing the affected costs based on the matters raised in Meralco’s Dec. 5, 2013 letter; and (c) Enjoining Philippine Electricity Market Corp. (PEMC) from demanding and collecting the deferred amounts representing the affected costs based on the matters raised in Meralco’s Dec. 5, 2013 letter.”
Comply with order
Meralco, which is prohibited from collecting any increase in power generation rates in December 2013, as well as regulators said they would observe the status quo.
However, the petitioners against the power hike said the new TRO was only one step in resolving the issue.
All parties expressed hope that the high court would issue a ruling on whether the rate increase should be allowed.
Meralco officials said the country’s largest distribution utility “respects” the order.
William Pamintuan, Meralco head of legal affairs, said via text message that Meralco would “fully comply” with the high court’s TRO.
ERC executive director Francis Saturnino Juan said: “We will still secure a copy of the Supreme Court’s resolution to know if there is anything ERC will have to do pursuant to it and if none, the ERC will just await further orders from the Court. In the meantime, the status quo will be observed.”
Last March, the ERC, under fire from legislators and the public, ordered the recomputation of “unjustifiable” WESM rates that factored into the controversial rate hike last December.
The rate increase for the month in question is thus expected to be much lower than the P3.44 per kWh that was addressed by the TRO.
The new rate is widely expected to be around P0.27 per kWh, although Meralco has not confirmed such figure. With the TRO extended, however, the new WESM rate will not be implemented yet. With reports from Christian V. Esguerra and Leila B. Salaverria source