By Lenie Lectura - February 5, 2020
THE Energy Regulatory Commission
(ERC) has given assurances that it will be able to release decisions on the
Manila Electric Co.’s (Meralco) power-supply agreements (PSAs) that underwent
competitive selection process (CSP).
“Lalabas na [They’re coming
out soon]. The resolutions are being finalized,” said ERC Chairman
Agnes Devanadera.
These PSAs are with First Gen Hydro
Power Corp., Phinma Energy Corp. and South Premiere Power Corp. for the supply
of 500-megawatt mid-merit capacity for five years that should have started on
December 26, 2019; and with Phinma Energy, SPPC and San Miguel Energy Corp. for
the supply of 1,200-MW brownfield capacity.
Devanadera said the resolution for
these PSAs were delayed because certain parties opposed the applications for
approval of these supply contracts even though these underwent a competitive
process.
“If there is an intervenor in the
case then we should also act on it,” the ERC chief said, explaining that the
delays in resolving cases could, at times, be attributed to this.
“Within February, by end of the
month, we will come out with the resolutions,” on pending PSAs, “including that
of the 1,800 MW of Meralco because ‘yun naman ang importante [that’s the
important one].”
Petition
filed
The Power for People Coalition (P4P)
filed last year a petition for intervention at the ERC, questioning the results
of the competitive bidding.
“We are pleased that after over two
years of Meralco’s insistent efforts to evade biddings for their power-supply
agreements, the CSP finally took place,” said Gerry Arances, convenor of the
Power for People Coalition. “We find it alarming, however, that Meralco is
still so set on ensuring that power consumers remain tied to paying for dirty
energy in the coming decade, while also suffering the impacts of destructive
power generation,” Arances added.
The National Association of
Electricity Consumers for Reforms Inc. (Nasecore), on the other hand, has asked
the ERC to penalize Meralco for alleged abuse of market power.
Nasecore claimed that Meralco
allegedly coerced the ERC into granting them provisional authority for their
PSA applications.
Nasecore alleged that Meralco’s
application for provisional authority 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 majeure’ situation,” Nasecore said.
In short, there was no force majeure
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.
Obviously, Nasecore said, Meralco
failed to do this; thus, creating this emergency condition which is of its own
making.” It added 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.”
However, Meralco assistant vice
president Joe Zaldarriaga said these PSAs underwent
CSP that were observed by 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,” said Zaldarriaga.
“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,” he added.
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