A consumer group has asked the Supreme Court to stop the Energy Regulatory Commission (ERC) from approving Manila Electric Company’s (Meralco) 20-year power supply agreements (PSA) that did not go through a competitive bidding process.
The Alyansa Para sa Bagong Pilipinas, Inc. (ABP) claimed that Meralco’s “midnight deals” with seven companies, including firms owned by Meralco’s owner Metro Pacific Group, would burden consumers with overpriced power costs of P12.44 billion a year.
Aside from seeking a temporary restraining order (TRO) to enjoin the ERC from approving the PSA, the ABP also asked the high court to nullify the ERC Resolution No. 1 Series of 2016 which extended the deadline for the start of competitive bidding of power supply from October 2015 to April 2016 which allowed Meralco to cut a deal with its sister companies.
Midnight contracts
In a 34-page petition, ABP, represented by Evelyn Jallorina and Noel Villones, claimed that Meralco signed seven “midnight contracts with its sister firms just four days before the April 2016 deadline.
ABP accused regulators of committing grave abuse of discretion when they approved ERC Resolution No. 1 “just to facilitate and legitimize the commission of an unlawful act.”
ABP blasted ERC chair Jose Vicente B. Salazar, Energy Secretary Alfonso G. Cusi, and the Philippine Competition Commission for their “betrayal, and ineptitude” in protecting consumers. “Monopoly spells manipulation. Monopoly is plain and simple greed for profit,” ABP said.
The petitioner said the ERC is mandated under the Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (Epira) to promote competition, encourage market development, ensure customer choice and penalize abuse of market power.
Like an albatross
“The resulting irreparable damage to the consumers rising 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 this law,” said ABP.
ABP claimed that data showed Meralco historically paid its affiliated power generators a 20 percent premium over unrelated power generators which would translate to 50 centavos per kilowatt hour.
The deal with the seven companies—Central Luzon Premiere Power Corp., St. Raphael Power Generation Corp., Panay Energy Development Corp., Mariveles Power Generation Corp., Global Luzon Energy Development Corp., Atimonan One Energy Inc., Redondo Peninsula Energy Inc.—would cover 90 percent of Meralco’s power requirements.