‘Time to sack ERC chair’

ERC CHIEF UNDER FIRE Energy Secretary Jericho Petilla speaks with ERC Chair Zenaida Ducut at the hearing of the Senate committee probing the record-high rate increase imposed by Meralco. Two lawmakers have asked Malacañang to suspend Ducut for allegedly not looking after the interest of consumers. RICHARD A. REYES

It’s time for President Aquino to kick Energy Regulatory Commission (ERC) Chair Zenaida Ducut out of office for approving the unprecedented rate increase of Manila Electric Co. (Meralco) without looking into whether this was warranted, according to two allies of Aquino.

Akbayan Representatives Walden Bello and Ibarra Gutierrez on Thursday filed a complaint against Ducut in the Office of the President, contending that Ducut was liable for gross neglect of duty for not looking after the interest of consumers, which is her duty.

They also asked that Ducut be preventively suspended while the charges against her are being investigated.

Ducut did not respond to requests for comment on Akbayan’s complaint against her. According to Ducut’s staff, the ERC head was informed of the complaint after the Senate hearing on the Meralco rate increase on Thursday.

There have been calls for Ducut to resign after Meralco’s huge P4.15/kilowatt-hour increase, which the Supreme Court temporarily stopped, but these have gone unheeded.

“Respondent [Ducut] is guilty of gross neglect of duty by tacitly approving, without the barest hint of due process, the unprecedented generation charges Meralco sought to pass on to consumers in the months of December 2013, February 2014 and March 2014,” Bello and Gutierrez said in their complaint.

In a statement, Bello said Ducut’s failure was “stupefying” because Meralco’s November increase was the largest ever since the Electric Power Industry Reform Act (Epira) was passed in 2001. She should have immediately ordered an inquiry into this, he added.

No inquiry

The Akbayan lawmakers also noted that the ERC under Ducut had allowed Meralco to provisionally increase the generation charges it passed on to consumers before inquiring into whether these were proper or not.

It did not even look into the reason behind the abnormally expensive price of energy on the Wholesale Electricity Spot Market (WESM), they said.

And this was despite the ERC being aware that these pass-on charges would further burden consumers, the lawmakers added.

“Despite the aforementioned red flags, which should have alerted a prudent regulator, the respondent went ahead and allowed Meralco to pass on the increased generation charge (albeit, staggered over a number of months) to its consumers, without even barest hint of a hearing or notice to the public,” they said.

The Akbayan lawmakers also contended that Ducut had allowed the approval of Meralco’s power supply agreement with generation companies although these deals had no provision for replacement power in case of outages of the generation firms’ power plants.

The agreement also states that Meralco should source the replacement power from the WESM.

“This is clear evidence of negligence and a violation of one of the fundamental policies embodied in the Epira: The quality, reliability, security and affordability of the supply of electric power to the public,” the lawmakers said.

Ducut represented Pampanga’s second congressional district from 1995 to 2004. She was appointed ERC chair in 2008 by then President Gloria Macapagal-Arroyo, who now represents the district.

Charged with malversation

The ERC chair was charged last year with malversation in the Office of the Ombudsman for allegedly acting as an agent of lawmakers in pocketing kickbacks from the Priority Development Assistance Fund (PDAF).

Whistle-blower Benhur Luy said in a sworn affidavit that Ducut had demanded a 5-percent commission for every pork barrel project she delivered to businesswoman Janet Lim-Napoles, the alleged brains of the P10-billion PDAF scam.

Speaker Feliciano Belmonte said he would have resigned had he been in Ducut’s position.

“Because you know, it is on my watch that all of this happened, and remember, after [the rate hike] was announced, they sought her OK… as if it’s a foregone conclusion that she would say yes,” Belmonte told reporters.

He said the rate increase was apparently the result of poor planning, since the shutdown of the plants took place at the same time.

Belmonte said Meralco should have anticipated this and should have taken steps to ask the plants not to shut down all at once.

The rate increase stemmed from the shutdown of the Malampaya gas pipeline for maintenance from Nov. 11 to Dec. 10. A number of generating firms also shut down, resulting in a huge shortfall in Meralco’s supply.

Meralco said the shortfall forced it to buy additional but more expensive power on WESM.

The country’s biggest power distributor and generating firms have been accused of colluding to jack up power rates.

Price manipulation

At the start of the oral arguments at the Supreme Court on Meralco’s rate increase on Jan. 21, Senior Associate Justice Antonio Carpio said the utility firm engaged in anticompetition and price manipulation when it instructed a power-generating firm to sell power at a high price on the spot market because this would jack up the price.

Meralco has 5.3 million customers and its franchise area, which includes Metro Manila, is home to a quarter of the country’s population.—With a report from Riza Olchondra

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