House panels tiptoe on Meralco ‘midnight’ deals

INQUIRER FILE PHOTO

Updated 7:55 p.m.

The House of Representatives’ good government and energy committees have jointly approved a carefully-worded report that stopped short of categorically seeking charges against officials of the Energy Regulatory Commission for allowing electric utilities like Manila Electric Company (Meralco) to forgo the bidding of their power supply requirements.

The committee report approved in a Tuesday hearing simply said that lawmakers “found a reason to refer the said findings and conclusions of possible commission of malfeasance, misfeasance and nonfeasance to the appropriate body for further investigation.”

The report stated that “if there is probable cause,” the quasijudicial bodies could “file the appropriate charges.”

At the same time, the committee report formally recommended that the ERC resolve the Meralco’s seven controversial power supply agreement (PSA) applications “based on the conclusions and findings by the joint committee.”

The plea for the ERC to keep in mind the alleged anomalies unearthed in the inquiry was a last-minute insertion sought by Bayan Muna Rep. Carlos Isagani Zarate, author of House Resolution No. 566 that triggered the inquiry.

The inquiry arose from the ERC’s controversial move to defer the competitive selection process (CSP) rule, which requires electricity distributors to hold competitive bidding for their power to lower consumer rates.

The rule was supposed to take effect on November 6, 2015. But on March 15, 2016, the ERC allowed a 45-day window deferring the CSP rule until April 30, 2016. This allowed 38 firms to procure an aggregate supply of 4,500 megawatts without having to hold a competitive bidding.

Pangilinan-led Meralco—whose Nov. 26, 2015 request for exemption from the CSP rule was originally denied on Dec. 10, 2015—especially had one last chance to negotiate seven power supply agreements with its sister generating companies for a total supply of 3,551 MW. Meralco submitted its PSA applications on Apr. 28, 2016, and these are currently pending before the ERC.

Several congressmen were initially queasy about the wording of the committee report, as the original draft categorically declared that “the ERC and its officials and employees committed malfeasance, misfeasance and non-feasance.”

Energy committee chair Rep. Lord Allan Jay Velasco suggested that the said statement be reworded, saying he believed that a recommendation to file charges against the ERC officials would be “premature” because Meralco’s PSA applications were still pending approval.

Good government committee chair Rep. Johnny Pimentel—who insisted that enough evidence had been dug up during the hearings—admitted that “the committee has no prosecutorial powers [and] we only have recommendatory powers.”

Ako Bicol Rep. Rodel Batocabe initially objected to the report’s recommendations and found the explanation wanting. “I have not read any specific acts that will show malfeasance, misfeasance and nonfeasance. What I read are mere conclusions of law,” he said.

1-CARE Rep. Carlos Roman Uybarreta, meanwhile, said the report should not have judged the propriety of the deferment of the CSP rule, because the Supreme Court has yet to resolve a pending petition against the ERC resolution.

Meanwhile, Minority Leader Danilo Suarez took the cudgels for Meralco and harped on the urgency of approving its PSA applications, especially as the electrical grid grapples with thinning reserves.

It may be noted that one of the questioned PSAs involves Atimonan One Energy, Inc., accounting for 1,200 megawatts. Atimonan is part of Suarez’s province.

Suarez echoed the claim of Meralco that even without going through bidding, it would be able to sell electricity at a “cheap” rate of P4 per kilowatt-hour.

But, Zarate said “we can only speculate now that what Meralco is saying is true,” since it did not conduct the CSP and present offers from other power generating companies.

He insisted that the Meralco PSA applications should be scrapped. “The PSAs subject of our investigation are the logical and natural fruits of an act which we have characterized as graft, and should, therefore, be rendered invalid,” he said./ac