Collusion probe still on despite SC halt order - Palace

Posted at 12/25/2013 9:28 AM | Updated as of 12/25/2013 9:28 AM

MANILA - The investigation into alleged collusion among power generators will continue despite the Supreme Court (SC)’s temporary restraining order on the Manila Electric Co. (Meralco)’s P4.15 per kilowatt-hour increase in power rates, Malacañang said yesterday.

Asked if the government would support petitions permanently stopping the power rate hike, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the Office of the Solicitor General (OSG) by law should represent the Energy Regulatory Commission (ERC), which approved the increase on Dec. 9 as well as its three-step collection this month, in February and in March.

He said the investigation of the Department of Justice and Department of Energy into allegations of collusion among power firms “may continue as the TRO pertains only to Meralco’s power rate hike.”

“We reiterate government’s determination to protect the citizens’ welfare and prevent abuse of market power,” Coloma said.

Asked about the SC’s TRO, Coloma expressed hope that a final decision by the high tribunal would redound to the best interest of consumers.

Party-list group Bayan Muna said yesterday it hoped to persuade the SC to make permanent its order stopping Meralco from collecting P4.15 more per kilowatt-hour.

“The TRO, though it was a welcome Christmas gift to burdened consumers, is just a temporary relief. We need to prepare and fight for a permanent injunction against this unjust power rate increase,” Rep. Neri Colmenares said.

Bayan Muna led its party-list allies in filing a petition with the SC last Friday questioning Meralco’s rate hike.

The National Association of Electricity Consumers for Reform filed a second complaint.

The SC has scheduled oral arguments on the two petitions for Jan. 21.

Its TRO, issued on Monday and which was effective immediately, is good only for 60 days.

Colmenares said they hope to convince SC justices that the ERC violated the people’s right to due process by approving Meralco’s rate adjustment without conducting public hearings.

He said consumers were denied the opportunity to scrutinize and oppose the largest increase in the cost of electricity in years.

He said the ERC failed to fulfill its mandate to protect public interest by not examining Meralco’s rate hike in detail and asking the distributor to justify every centavo of it before allowing its collection.
He added that the regulator’s automatic generation rate adjustment mechanism should be junked as it is against the constitutional right of consumers to due process.

In view of the SC decision stopping the increase, Colmenares urged Meralco to return whatever amount of adjustment it has collected this month or credit it to its customers’ bills for January.

Another petitioner, Alliance of Concerned Teachers Rep. Antonio Tinio, said the SC should stop the “predatory” practices as well as collusion among power producers and distributors.

“We hope the Supreme Court will rule with finality on the substantive issues raised in our petition, in order to curb the cartel-like practices in the power generation industry, connivance leading to predatory rates and ERC’s failure to exercise its powers and functions to protect the public,” he said.

He said they also would convince the SC to strike down provisions of the Electric Power Industry Reform Act (EPIRA) of 2001 declaring that power generation is not a public utility and is purely a profit-driven private enterprise.

“This controversy should lead to the effective repeal of EPIRA, which, contrary to its objectives, has not brought down the cost of electricity and has not dismantled cartels in the power industry,” he added.

Tinio said on the contrary, the law has resulted in substantially higher electricity cost, earning for the country the unenviable reputation of having one of the highest power rates in the world despite being a developing nation.

Under the ERC’s approval of Meralco’s request for a staggered collection of its P4.15-per-kwh increase, P2.41 would be billed this month, P1.21 in February and 53 centavos in March.

This is on top of the usual generation charge of about P5.70 per kwh.

Millions of Meralco customers in Metro Manila and nearby provinces, including Rizal, Laguna, Cavite, and Bulacan, have already paid this month’s adjustment.

There is supposed to be no increase for January.

Even Meralco’s television advertisements explaining the P4.15 increase do not mention anything about the generation charge to be billed next month.

The ERC surprised the public last weekend when it announced that it was stopping any increase in the January billing.

The surprise announcement prompted Cavite Rep. Elpidio Barzaga Jr. of Dasmariñas City in Cavite to say that there was a planned adjustment next month that officials of both ERC and Meralco have not revealed to the public.

He urged the regulator and the distributor to “level up” with the public and with lawmakers, who have opened an inquiry into the rate increase.

According to Meralco, the P4.15 increase represents higher electricity procurement costs between Nov. 11 and Dec. 10, when the Malampaya natural gas facility in Palawan was closed for annual maintenance.– With Jess Diaz