Meralco warns of blackouts without power rate hike

(Updated 11:54 p.m.) The Manila Electric Co. (Meralco) has warned of rotational blackouts if it can no longer pay for generation and transmission charges as a result of the Supreme Court's temporary restraining order on the rate hike.

"With the TRO in place, it will not be far-fetched to imagine that some (generation companies) might altogether refuse to sell electricity to Meralco, or decide to sell to Meralco only such amount of electricity as is commensurate to the resulting rate of P5.6673 per kilowatt-hour," Meralco said in a statement to the court on Thursday.

It further warned "the transmission company may stop transmitting if Meralco was unable to pay for the transmission charges. The entire power industry may come to a screeching halt."

It said the rotational brownouts will have "dire consequences [on] the economy and security."

If the court case drags on, or the power rate hike is nullified by the court, the public may be facing power interruptions in the hottest part of the year, the summer months from March to May.

Power suppliers must answer petition

Meralco has also dragged energy suppliers into the debate on its controversial P4.15 per kilowatt-hour power rate hike, saying they should also be made to answer the petition against the increase filed at the Supreme Court.

Meralco, in its counter-petition filed Thursday, claimed it was forced to buy expensive electricity from the Wholesale Electricity Spot Market (WESM) to meet the 2,700-megawatt deficit for the peak load demand of Luzon after its major source of power, the Malampaya natural gas platform, went on a maintenance shutdown from November 10 to December 11.

But the petitioners argued that the shutdown had been announced much earlier and Meralco had no reason to pass on additional charges to consumers.

The increase was supposed to have been divided into three tranches consisting of a P2.41 increase last December, P1.21 in February, and P0.53 in March. The Supreme Court issued a temporary restraining order on the rate hike two days before Christmas.

Dragging the energy suppliers into the fray, the country's biggest electricity company said: "It is unfair to prevent or disallow Meralco from billing and collecting these increased charges unless the sources of such increased charges are likewise prevented or disallowed from billing and collecting the same from Meralco."

The company told the high court that Meralco did not benefit from the cause of the rate increase, which it attributed to other charges.

 

 

The power company blamed higher electricity rates on WESM, where power suppliers submit bids to provide electricity for istributors like Meralco.

Meralco said power rates at the WESM spiked due to lower supply levels stemming from the simultaneous and scheduled shutdown of power plants like the Malampaya plant in November and December. 

 

Saying these firms are the "real parties in interest," Meralco asked the high court to also include as respondents in the case a number of generation companies that trade in the WESM, including:

 

 

Meralco asked the court to require these firms to file their respective comments on the consolidated petitions contesting the power rate hike.

 

Currently, only Meralco, the Department of Energy and the Energy Regulatory Commission are the respondents named in the consolidated petitions pending before the SC.

No proof of collusion

 

Meralco branded the petitions as "premature" since the petitioners' allegation of collusion falls within the "original and exclusive jurisdiction" of the ERC and not of the courts.

 

The power distributor also claimed that the petitioners failed to provide proof that Meralco colluded with a number of generation companies.

"On the contrary, Meralco took steps to mitigate the consequences of the maintenance shutdown of various power plants," it said.

 

The petitioners have argued automatic rate adjustments cannot be done without first publishing it in newspapers. The petitioners also said the rate increase violates the Electric Power Industry Reform Act.

 

In its comment, however, Meralco insisted that the automatic adjustment mechanism "faithfully comply with the requirements of due process."

 

It added that the rates charged, or the formula to derive such rates, by Meralco were approved by the ERC and other relevant government agencies after the appropriate notice and hearing.

 

Meralco also insisted that the EPIRA provisions being assailed by the petitioners were "valid and constitutional... and consistent with, and essential to, the successful implementation of the declared policies of the state under the Constitution."

 

The consolidated petitions were from a group of party-list lawmakers from Bayan Muna, Gabriela Women's Party, and Act Teachers, and from the National Association of Electricity Consumers for Reforms (Nasecore) and the Federation of Las Piñas Homeowners Association. — JDS/HS, GMA News