SC urged to stop Meralco’s midnight power supply deal
A consumer group on Tuesday asked the Supreme Court to stop the Energy Regulatory Commission (ERC) from approving a 20-year power supply agreement (PSA) between Manila Electric Company (Meralco) and several general companies covering 3,551 megawatts or 90 percent of power supply requirements.
In a 34-page petition, the Alyansa Para sa Bagong Pilipinas, Inc. (ABP) urged the high court to issue a restraining order against the approval of the PSA and eventually nullify the ERC resolution directing all distribution utilities to conduct competitive selection process (CSP) in the procurement of their supply to the captive market.
Petitioners said ERC committed committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the resolution.
They said ERC has reneged its duty under the Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).
Under the EPIRA law, ERC is mandated to promote competition, encourage market development, ensure customer choice and penalize abuse of market power.
“There is no justifiable reason for the existence of the assailed resolution other than to facilitate and legitimize the commission of an unlawful act. The ERC clearly evaded its positive duty,” the petitioners said adding that with the extension, Meralco was able to enter into negotiated PSAs with its affiliated generation companies without the benefit of conducting a CSP.
There are seven contracts between Meralco and its affiliated generation companies that were signed only four days before the new deadline, denying the consumers the benefit of competition and subjecting them anew to overpriced negotiated prices.
Once approved by the ERC, petitioner told the high court that 5.8 million consumers of Meralco’s captive market will be burdened by the PSA for 20 years.
“The resulting irreparable damage to the consumers arising from the 20-year contracts would easily translate to P12.44 billion a year that would be mercilessly hung on the necks of consumers like an albatross if these midnight power supply agreements are allowed to evade the law,” the petitioner said.
“It will also sabotage the promotion of free and open market competition, and preclude the competition operation of the spot market,” it said adding that “the consumers will be shouldering the passed on charges arising from these midnight and sweetheart PSAs.”
Named as respondents in the case were ERC, Department of Energy, Meralco and its sister generation companies Central Luzon Premiere Power Corporation, St. Raphael Power Generation Corporation, Panay Energy Development Corporation, Mariveles Power Generation Corporation, Global Luzon Energy Development Corporation, Atimonan One Energy Inc., Redondo Peninsula Energy Inc., and Philippine Competition Commission (PCC).
The petitioner added that there is no other justifiable reason for the issuance of ERC Resolution No.1 “other than to facilitate and legitimize the commission of an unlawful act.”
