More power firms included in Meralco rate hike case

Posted at 01/10/14 5:26 PM

MANILA, Philippines - The list of respondents in the petition against the Meralco rate hike before the Supreme Court has grown longer.

On Friday, the high court issued an order granting Meralco's plea to include the National Grid Corporation of the Philippines (NGCP), Power Sector Assets and Liabilities Management Corp (PSALM), Philippine Electricity Market Corp. (PEMC) and several power suppliers and generation companies as respondents in the case.

The high court ruled in Meralco's favor, and ordered the additional respondents to file their respective comments on the petitions of Bayan Muna Rep. Neri Colmenares, et al, and National Association of Electricity Consumers for Reforms (Nasecore), et al. on or before January 20.

Aside from the NGCP, PSALM and PEMC, the additional respondents are: First Gas Power Corp., South Premiere Power Corp., San Miguel Energy Corp., Masinloc Power Partners Co. Ltd., Quezon Power (Phils) Ltd. Co., Therma Luzon Inc., Sem-Calaca Power Corp. and FGP Corp.

The following generation companies that trade in the WESM, were also included: 1590 Energy Corp., AP Renewables, Inc., Bac-Man Energy Development Corp/Bac-Man Geothermal, Inc.,First Gen Hydro Power Corp., GNPower Mariveles Coal Plant, Ltd. Co., PANASIA Energy Holdings Inc., PSALM, SN Aboitiz Power, Strategic Power Development Corp, Trans-Asia Power Generation Corp., and Vivant Sta Clara Northern Renewables Generation Corp.

The consolidated petitions are seeking the nullification of Meralco's controversial P4.15 per kilowatt hour rate hike. Petitioners claim the rate adjustment is unconstitutional as it violates the right to due process of consumers.

In its 241-page comment on the petitions, Meralco urged the high court to include the NGCP, PSALM, PEMC, and the said firms as "indispensable parties."

An indispensable party "is a party-in-interest" in a case without whom no final decision or resolution may be handed down.

Meralco has repeatedly said that the new rate adjustment was brought about by the spike in generation charge.

"In the case at bar, the GenCos, PEMC and NGCP are indispensable parties.... [who] stand to be injured or benefited by the outcome of the consolidated petitions, which ultimately seek to permanently enjoin Meralco from recovering the automatic increase in generation charge and other pass-through adjustments in the total amount of PhP4.1474/kwh for the December 2013 billing month," Meralco said.

The power distribution firm said that to allow the PEMC and generation companies to collect from Meralco the full amount of the Wholesale Electricity Spot Market (WESM) billings for the increase in generation charge "would be grossly unjust, inequitable, and very unfair" not only to Meralco but to its consumers as well.

"[S]uch generation charges are purely pass-through charges and therefore, revenue neutral to Meralco," Meralco stressed.

The high court issued a 60-day temporary restraining order (TRO) in December, preventing Meralco from collecting the rate hike.

Meralco pointed out that while they are restrained from increasing consumers' billings, the generation companies are not covered by the same TRO and are imposing the increased generation charge on them.

This will seriously "impair and damage" the distribution firm's "financial and credit position and continued operations,"Meralco stressed.

The high court also directed the new respondents to attend the Jan. 13 scheduled preliminary conference on the Jan. 21 oral arguments on the consolidated petitions.

On Thursday, the SC, on its own, included PEMC, SEM-Calaca Power Corp., Masinloc Power Partners Corp., Therma Luzon Inc., San Miguel Energy Corp., South Premier Power Corp. and Therma Mobile Inc. as "necessary parties" in the case.