By
Lenie Lectura - December 11, 2019
The
National Association of Electricity Consumers for Reforms Inc. (Nasecore) is
asking the Energy Regulatory Commission (ERC) to penalize the Manila Electric
Co. (Meralco) for alleged abuse of market power.
In its motion filed
with the ERC, Nasecore also pointed out that Meralco allegedly threatened the
ERC into granting them provisional authority (PA) for their five power supply
agreement (PSA) applications pending before the commission.
Nasecore alleged that
Meralco’s application for PA for the issuance of the PSAs is tantamount to a
threat to the government regulator as it provided the ERC with a deadline of
December 26, 2019, to approve the contracts. Otherwise, it added, Meralco
may be “exposing” its consumers to “volatile” electricity prices.
“The subject
application seeks this PA which means that there is an emergency situation not
within the control of Meralco. However, it should be stressed that this emergency
situation is not based on a ‘force majeur’ situation,” Nasecore added.
In short, there was no
force majeur beyond Meralco’s control that prevented it from sourcing,
procuring and entering into bilateral contracts in accordance with the law and
rules governing the same, on the Power Demand and Supply Outlook and
Distribution Development Plan it submitted to the DOE as early as 2016, the
group added.
“Obviously, Meralco
failed to do this, thus creating this emergency condition which is of its own
making,” it said, adding that “this application holds hostage the regulators
into approving the contracts. It’s a veiled threat not only to ERC but also to
its consumers.”
Meralco is seeking the
approval of ERC for five power supply contracts with San Miguel Energy Corp.,
First Gen Hydro Power Corp., South Premiere Power Corp. and Phinma Energy Corp.
for 1905 megawatts as some of its current supply contracts are set to expire on
December 25, 2019.
“Meralco’s application
for PA is not based on force majeure condition. Therefore, inappropriate,
misplaced and a violation of the law as this constitutes abuse of market power,
such as not limited to unfair trade practices, monopolistic schemes and any
other activities that will hinder competitiveness or business and industries,”
said Nasecore.
When sought for
comment, Meralco Assistant Vice President Joe Zaldarriaga said these PSAs
underwent CSP’s (competitive selection process) that were observed by the
Department of Energy.
“We presented and
continue to present our evidence and testimony in public hearings at the ERC,
during which other consumer groups expressed their support for the approval of
the PSAs except, perhaps, for a few. We believe the PSAs will benefit our
customers through cost competitive and reliable supply. To also say that
we issued a threat or any form thereof is baseless, unfair and devoid of
factual and legal basis,” he said.
“I really hope that we
just stick to the issues which is to obtain the least cost through reliable and
adequate supply as evidenced by our submission to the regulator,” Zaldarriaga
said.
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