Published July 8, 2017, 10:00 PM By Ben R. Rosario
A congressional probe into the
questionable approval of long-term power supply contracts entered into by power
distributor Meralco has led to proposals to hold Energy Regulatory Commission
(ERC) officials responsible for administrative or criminal liabilities.
Assistant Minority Leader and ABS
Partylist Rep. Eugene De Vera, together with Asst. Majority Leader and 1-Ang
Edukasyon Partylist Rep. Salvador Belaro, said Meralco is barred from entering
into a 20-year power supply contract when its legislative franchise is due to
expire in 11 years.
De Vera said the congressional
inquiry into the supposed “sweetheart deal” between Meralco and its sister
companies is expected to determine ERC’s role in allowing Meralco to enter into
power supply agreements (PSA) with firms co-owned by the firm.
He said ERC is fully aware that
Meralco’s franchise is expiring in 2028 while the PSA will end in 2037.
“Hence the contracts appear to be
void as Meralco has 11 franchise years only,” De Vera said.
The partylist solon added: “PSAs are
impressed with public interests so the ERC should take judicial notice of the
franchise.”
Moreover, Belaro said that entering
into such contracts is “ultra vires” (beyond the authority) on the part of
Meralco because it has no power to carry out provisions of the agreement in the
next 20 years.
Consumer groups People Opposed to
unWarranted Electricity Rates (POWER) and the United Filipino Consumers and
Commuters (UFCC) decried as “illegal” ERC’s extension of the mandatory
competitive process that paved the way for Meralco to enter into 20-year supply
contracts with its alleged sister companies.
In a letter to President Rodrigo
Duterte, the UFCC said the “20-year sweetheart deals effectively tied down
Filipino consumers” to power supply deals that could cost R12.44 billion
annually.
POWER chided the government power
regulatory body for extending the CSP for six months, thus, allowing Meralco to
“finish negotiating” power supply agreements with its own affiliated companies.
In a joint hearing by the House
Committee on Good Government and House Committee on Energy last July 4, POWER
pointed out that the seven PSAs of Meralco with its sister companies cover
3,551 megawatts, or approximately 90% of its power requirements for the next
20-25 years.
“Thus, by extending the deadline by
six months, the ERC allowed Meralco to evade competitive bidding for 90% of its
power purchases covering the next 20-25 years. Worse, these contracts were with
its sister companies,” said POWER Convenor and former Bayan Muna representative
Teddy Casiño.
The extension was reportedly upheld
by ERC Commissioners Josefina Asirit, Gloria Yap-Taruc and Geronimo Sta. Ana.
Under Sec. 45 of EPIRA, Meralco and
other power distributors are allowed to contract not more than 50% of its power
requirements from affiliated companies. This is to avoid price manipulation and
other monopoly practices.
“Sec. 45 of EPIRA is a token
safeguard but a limitation nonetheless on monopoly practices in the power
industry. The more Meralco is allowed to buy power from its sister companies,
the more they can connive with each other in jacking up power rates,” Casiño
said.
During the hearing, Meralco admitted
that Meralco PowerGen Corp. owned 48% of Redondo Peninsula Energy Inc., 50% of
St. Raphael Power Generation Corp., 100% of Atimonan One Energy, Inc., 49% of
Mariveles Power Generation Corp.
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