SC urged: Stop power rate hike
Six party-list lawmakers on Thursday asked the high court to stop the record power rate increase that Manila Electric Co. is charging 5.3 million customers starting this month. INQUIRER FILE PHOTO
The battle to stop the record power rate increase that Manila Electric Co. (Meralco) is charging 5.3 million customers is now in the Supreme Court.
Six party-list lawmakers on Thursday asked the high court to stop Meralco from implementing the staggered P4.15 per kilowatt-hour rate increase starting this month.
The lawmakers from the so-called Makabayan bloc filed a petition for certiorari and prohibition on the Energy Regulatory Commission’s approval of Meralco’s proposal to pass on to consumers the increase in the generation cost for November.
The militant bloc questioned the constitutionality of two provisions of the Electric Power Industry Reform Act of 2001 (Epira), which say that power generation and supply sectors are not public utilities and that their charges to the public are beyond the regulation of the ERC.
The lawmakers also want the high court to issue a temporary restraining order and/or preliminary injunction on the rate increase pending the resolution of their petition.
Article continues after this advertisement“As the approval of the staggered rate hike is already in full force and effect, petitioners and the entire captive market of Meralco are already suffering grave and irreparable injury and, unless the implementation of the rate hike is enjoined, will continue to suffer grave and irreparable injury,” the petitioners said.
Article continues after this advertisementThe petitioners were Bayan Muna Representatives Neri Colmenares and Carlos Isagani Zarate, Gabriela Representatives Luz Ilagan and Emmi de Jesus, ACT Teachers Rep. Antonio Tinio and Kabataan Rep. Terry Ridon.
The lawmakers’ move came days after groups like Akbayan and Freedom from Debt Coalition went to see Justice Secretary Leila de Lima to ask the Department of Justice (DOJ) to determine whether there was a collusion among power firms to jack up the cost of their electricity sold to Meralco.
Office for Competition
De Lima has said the Office for Competition will try to find out whether the increases are justified and whether the power firms violated antitrust laws.
Others groups also want the rate increase stopped. The National Association of Electricity Consumers for Reforms Inc. is set to file Friday a petition seeking a status quo ante order from the high court on the Meralco rate hike.
In their petition, the party-list lawmakers held that ERC committed grave abuse of discretion in approving the Meralco increase because it violated Epira provisions that required it to “promote competition and penalize abuse of market power in the restructured electricity industry.”
Highly irregular
They said the ERC should have investigated the “highly irregular shutdown” of power suppliers during the Nov. 11-Dec. 10 scheduled shutdown of the Malampaya gas pipeline.
The shutdown of the gas pipeline and the power firms led to the rise in the cost of electricity that Meralco was buying from its suppliers.
The pipeline shutdown also forced plants that use cheaper natural gas from Malampaya and supply power to Meralco to utilize more expensive fuel.
“The ERC, however, blatantly reneged on its duty to protect the public from anticompetitive practices and market abuse when it approved the P4.15 increase despite clear indications of irregularity in the simultaneous planned and unplanned shutdown, the hefty spike of electricity prices on the Wholesale Electricity Spot Market (WESM) and the unprecedented increase that Meralco is asking for,” the petitioners said.
Probe of collusion
They said the ERC should have stopped the implementation of the Meralco rate increase and disapproved its request for staggered rate hike when the Department of Energy decided to investigate the alleged collusion among industry players to manipulate prices.
The petitioners said ERC’s approval of the Meralco increase in the generation cost for November was “void” because the agency had failed to comply with the the due process requirements under the law.
Discretion ‘abused’
They said the ERC gravely abused its discretion when it allowed the increase without giving customers a chance to be heard.
The petitioners also held that Sections 6 and 29 of the Epira, declaring that power generation and supply sectors are not public utilities and that their charges are beyond the scope of ERC’s regulation, are unconstitutional. They want these to be removed.
They maintained that these sectors were public utilities and must be subject to franchise requirement and supply/price regulation.
“The players in the power sector—specifically the generation and supply sectors—have escaped accountability by virtue of the Epira, which dictates that these sectors are beyond the regulating power of the ERC.
“Due to this provision, the generation and supply sectors, especially since they are not considered public utilities under Sections 6 and 29 of the Epira, are emboldened in manipulating the market and colluding with one another in order to jack up electricity rates,” they said.
The lawmakers also asked the high court to hold an oral argument “so that issues could be more exhaustively threshed out.”
Senate President Franklin Drilon pressed the DOJ and the National Bureau of Investigation to dig deeper into the possible collusion among power generators and to file charges if warranted.
“The investigation I’m calling for is for purposes of prosecution,” Drilon said, a day after the Senate opened an inquiry into the shutdowns by power plants that led to a P4.15/kWh rate increase in Meralco’s huge franchise area that includes Metro Manila.
Drilon said the DOJ and its investigative arm, the NBI, should initiate an “in-depth” investigation of the collusion between the generators “so that appropriate charges” under the Revised Penal Code could be filed.
“Our present laws punish monopolies and combinations in restraint of trade. This is punishable under our Revised Penal Code. Monopolies and combinations which tend to restrict free commerce are punishable,” he said.
Drilon said the DOJ and the NBI could mount the investigation without waiting for a tripartite committee to wrap up its own by yearend.
After all, the two bodies are clothed with power to conduct investigations and check whether penal statutes were violated, he said.
“There are charges of collusion and therefore instead of a free competition, there is a monopoly. So, there was collusion to increase artificially the prices on spot market. That must be looked into,” he told reporters.
Conflict of interest
At Wednesday’s Senate hearing, the president of Philippine Electricity Market Corp. (PEMC) said all the power distributors were players on WESM.
If this was the dynamics, Sen. Antonio Trillanes IV raised the possibility of conflict of interest especially if plants shut down so they could gain from the sale of power on the spot market at a higher rate.
ERC officials said that gaming on the spot market and shutdowns without justification were signs of collusion.
To establish collusion, Trillanes asked the PEMC to submit a list of the power generators that transacted on the WESM during the shutdown so they would be “cross-referenced” with the owners of the plants.
Sen. Sergio Osmeña III, chair of the energy committee that inquired into the matter jointly with the trade committee, however, said there was no proof of collusion at this point.
A preliminary investigation by the Department of Energy showed that power plants had reneged on their commitment to fill the supply gap as a result of the scheduled monthlong shutdown of the Malampaya pipeline, causing power rates to shoot up.
Review of Epira
Drilon said he would also call for a review of the Epira law in view of the three-tiered power-rate adjustment that will be implemented in December, February and March.
He said that amendments could be introduced to address problems that “resulted in a series of power outages.”
“The Epira is supposed to promote free competition in order that the consumers can benefit from a lower but efficient power generation system. The opposite apparently happened,” he said.
Drilon said the review of the Epira law would be based on the outcome of the hearing by the Senate committees.
Low rates for poor
Meralco, which has started issuing billing statements to customers, said on Thursday that customers in its network with the lowest consumption levels were enjoying discounts.
The largest distribution utility said that those consuming 100 kWh or less were presumed to belong to low-income households and were thus charged lower power generation and related rates than the others.
“About 40 percent of our network is what we call lifeline users or those that consume 100 kilowatt-hours of electricity or less per month. They comprise about 2.1 million customers in our network,” Meralco head of utility economics Larry Fernandez said in a phone interview. Meralco had a customer base of 5.3 million as of November.—With a report from Riza T. Olchondra
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