Meralco clarifies issues vs power supply deals

Posted on November 23, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=meralco-clarifies-issues-vs-power-supply-deals-&id=136761

MANILA ELECTRIC Co. (Meralco) has issued a statement on Tuesday clarifying questions raised against its recent power supply agreements (PSAs) with various power generation companies after the death of an executive at the Energy Regulatory Commission (ERC).

William S. Pamintuan, Meralco’s lead lawyer, said the PSAs were filed by the company in accordance with ERC rules and regulation, and that these went through “a very transparent and rigorous public hearing process.”

Some news reports questioned the agreements after ERC Director Francisco Jose S. Villa, Jr. took his own life on Nov. 9, with a member of his family claiming he had been pressured to approve contracts for procurements and hiring consultants without proper bidding and procedure.

Mr. Villa headed the bids and awards committee at the ERC before his death.

However, Mr. Pamintuan said the power supply agreements “are not part of the matters being taken up by the Bids and Award Committee of the ERC which actually deals with internal contracts and procurement at the ERC.”

“The fact of the matter is that these PSA applications are still pending hearing before the ERC. It is therefore unfair and not truthful to insinuate any connection of these PSA applications to the current controversy at the ERC,” he added.

The PSAs in question cover a total of 3,551 megawatts (MW) with seven generation companies, which Meralco filed with the ERC before the effective date of rules on competitive selection process (CSP) on April 30, 2016. The agreements will become effective upon ERC approval.

The CSP rules aim to lower power costs by requiring a utility to hold a competitive selection process to find the least costly electricity supply. For Meralco’s CSP, it advertised the price offered by a electricity supplier while asking challengers to offer a lower price.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. -- Victor V. Saulon