Palace eyes refund if collusion among power firms is proven

Communications Secretary Herminio Coloma. INQUIRER FILE PHOTO

MANILA, Philippines — Malacañang floated the possibility of a refund should power producers be found to have colluded to jack up electricity rates.

Communications Secretary Herminio Coloma said the DOE “has instructed the ERC to look into the outages in several power plants that occurred while the Malampaya repairs were taking place.”

“Under the Epira law, both DOE and ERC are mandated to ascertain that power rate adjustments are not driven by anti-competitive or market abuse practices,” he said in a statement, referring to the Electric Power Industry Reform Act.

“It’s stated in Epira and based on what happened before, if there was abuse in the collection, the concrete resolution would to have a refund.”

“The government’s foremost concern is to ease the people’s burden on the imposition of power rate adjustments brought about by the Malampaya shutdown,” he added.

The Palace made the assurance amid a DOE investigation of possible “collusion” involving power plants that shut down almost at the same time last month, prompting Meralco to purchase electricity at a much higher price at the spot market.

Asked about the possibility of suspending the rate adjustment pending the result of the DOE probe, Coloma cited requirements at the ERC before power utility companies could go into “cost recovery, rate-setting practices.”

“To my understanding, nothing has happened, so far, that would be enough under the law for the ERC to suspend that process,” he added.

Malacañang earlier defended the increase in generation charge, saying it was neither “arbitrary” nor “unreasonable.”

The adjustment was “temporary” as a result of the “maintenance shutdown of the Malampaya natural gas plant that was scheduled from Nov. 11 to Dec. 10,” Coloma said.

As to whether Palace was sticking to this position, Coloma said, “What our government is ensuring is the [rate adjustments’] basis in law and their effect on the welfare of our people.”

Even if the electric power industry was now “market-driven,” Coloma said, “The mandate of the law is clear that market forces should not be abused in any way.”

He said the Palace was open to amending Epira, but noted that the matter should first go through a “thorough study or analysis” among “stakeholder groups.”

“We are open to a review of all of these policies, especially if the outcome is to be able to produce more responsive and progressive reform measures that will result in benefits to our citizens,” he said. “Our only appeal is for the process to be reasonable, truthful and meaningful.”

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