ERC set to defend Meralco rate hike

Posted at 01/20/14 4:28 PM

MANILA (UPDATE) – The Energy Regulatory Commission (ERC) is ready to defend its position during the oral arguments at the Supreme Court on Tuesday.

Set to be taken up is Meralco's more than P4 hike in generation charges, which was earlier halted by the high tribunal.

Among the 8 issues that will be discussed is whether or not the ERC abused its power when it allowed the hefty increase.

Another question that will be tackled is, does the automatic pass-on mechanism of charges violate due process which consumers are entitled to?

The ERC said it will explain its decision to give the go-signal to the botched electricity price hike.

“Ang posisyon ng ERC ay ang mekanismong ipinatutupad ngayon ay hindi naman lumalabag sa batas,” said ERC executive director Francis Juan.

Another issue that will be examined is the constitutionality of two provisions of the Electric Power Industry Reform Act (EPIRA) declaring power generation and supply as non-public utilities, thus their charges are not regulated.

The oral arguments will also focus on whether or not it's time to lift the temporary restraining order (TRO) on Meralco's hike.

The question is: will it benefit consumers to prolong or extend the TRO on the rate hike and peg the generation charge at P5.67 per kilowatt hour (kwh) in the next several months?

Apparently not, since based on historical data, the average generation charge of Meralco from January to November 2013 is actually lower than P5.67 per kwh before electricity prices spiked in the spot market.

Energy Secretary Jericho Petilla admits that based on averages, it appears that the consumers are at the losing end if the P5.67 per kwh persists for months.

Petilla favors a quick resolution of the case.

“Nothing beats a quick resolution. Kasi ang gusto lang naman malaman ng lahat is saan tayo papatungo? For as long as its hanging, hindi natin alam kung saan papatungo,” said Petilla.

Aside from Petilla, ERC chair Zenaida Ducut was also required to attend the oral arguments.

Meralco, power producers, activists, and consumer groups will also participate.