Lawmakers slam ERC for slow pace of power rate hike probe

Posted at 01/22/14 4:07 PM

MANILA, Philippines - Lawmakers on Wednesday expressed frustration over the slow pace of the Energy Regulatory Commission's probe into the alleged collusion among power generators to undertake power plant shutdowns, which led to a spike in electricity rates.

Akbayan Rep. Walden Bello warned ERC chairman Zenaida Ducut that they will submit the basis for her removal to the President.

Bello slammed the preliminary finding submitted by the ERC to the House energy committee.

"Alam na ho lahat ng tao yan. This is a non-report. In the first hearing na establish na ito and yet after a month when you're supposed to have an investigation, this is what you give us. Di ba dereliction of duty ito? This is a major issue consumer issue," he said.

ERC executive director Francis Juan said, "Ito lang ang nabigay ng investigation unit at the risk na baka may maibigay sila na hindi pa concusive."

Ducut reminded Bello that they need to have basis for her removal.

"If he finds your performance dismal, he has authority to dismiss you in office," Bello told the ERC chief.

Ducut replied, "But there should be a basis for doing so."

"We will submit the basis. We will submit it tomorrow," Bello retorted.

Ducut faced the panel for the first time since the energy committee started its probe.

Bello also grilled Energy Secretary Jericho Petilla on what he has done to address Meralco's power rate hike.

Petilla said they are deferring to the Department of Justice which is investigating the alleged collusion to include the ERC even as the ERC itself is undertaking its own investigation.

Petilla pointed out they are cooperating with the DOJ, while the ERC has the expertise to conduct the investigation.

Meanwhile, Bayan Muna Rep. Neri Colmenares said the slow pace of the investigation can be considered as "criminal negligence," calling the ERC's preliminary findings as a "non-finding."

The ERC report says that "a significant amount of time is necessary to collect, prepare, validate and assess data which would be the basis of the investigating unit's recommendation."

It also established that the supply situation from October 26 to December 25, 2013 was a factor which contributed to the historical high bids being accepted as clearing prices in the wholesale electricity spot market.

It also said that factors that affected the supply situation were plant outages and non-offer by plants.

"At this stage, the undersigned respectfully declines to provide more details of the investigation lest the IU (investigating unit) be accused it made a determination at this point of the investigation," it said.

The preliminary report was signed January 14, 2013 by ERC's Juan.

However in a December 20, 2013 annex of the report, the ERC ordered the issuance of show causes orders to 7 power plants for allegedly failing to inform the government of its shutdowns.

Unscheduled shutdowns have allegedly been the cause for the lack of supply which caused rates to spike. The 7 power plants are FGP Corp San Lorenzo, TEC Pagbilao, Quezon Power Plant, Kepco Ilijan , SEM Calaca, GN Power Mariveles and Masinloc Power partners.

During the Energy committee hearing, lawmakers took turns trying to get more details from the panelists which included Ducut, Petilla and energy industry players.

However the ERC could not give answers, arguing that the investigation is still ongoing.

Energy committee chair Reynaldo Umali said, "We cannot wait forever for the result of investigation. We cannot make people wait for the answer to these issues Even if we ask a lot of questions we will never get a conclusion because under investigation. Matagal na itong investigation. We're using all our time."

Ducut, for her part, said the ERC only has four employees monitoring the wholesale electricity spot market, which is not enough.

ACT TEACHERS Party List Rep. Antonio Tinio grilled Meralco as to why it got its supplier, Therma Mobile to bid for electricity at the WESM at a high price of P62/kwh when it could have bought it for as low as P8/kwh.

Meralco general counsel Rey Espinosa however explained that it was because they thought the price wouldn't be cleared for purchase at the market.

"Yung sinasabing P62 nominated price yun binigay lang for off-peak intervals. Ayaw natin patakbuhin during off-peak dahil mas mura pag kinukunan ng kuryente peak hours Dapat tanungin bakit nag-clear P62 eh sabi NGCP adequate ang supply," Espinosa said.

Colmenares feels this was an error that Meralco should not charge to its consumers, asking Meralco to instead absorb the expense.