Rep Colmenares: Meralco ‘practically dictated’ power rates in November

Minority lawmaker Neri Colmenares on Thursday accused power distributor Meralco of dictating power rates in the Wholesale Electric Spot Market (WESM) through Aboitiz-owned Therma Mobile’s dealings during the Malampaya natural gas facility's shutdown in November.

“Meralco practically dictated the price at that time,” Colmenares said in a press conference.

“We don’t need to prove price collusion in essence. When Meralco confirmed that it asked Therma Mobile to bid power rates at P62, for us, the case is done.”

Colmenares also revealed that Therma Mobile owner and chief executive officer Erramon Aboitiz himself admitted that the company made high bids but passed the responsibility to Meralco because the latter has “full control of the use of the 100 MW power from Therma Mobile, including pricing and volume offers to the WESM.”

“[Therma Mobile] is a mere implementor of Meralco’s price and volume offers to the spot market or WESM,” Colmenares said.

In essence, the high bids created a domino effect, jacking up power rates in the whole power market, including those in the provinces, Colmenares said.

“Those instances that Meralco as alleged by Therma Mobile [dictated] the market price of the entire market, tataas ang presyo ng kuryente mo. Sa probinsya, tataas din ang rates. Isn't that a monopoly already? You practically hold 60 percent,” Colmenares said.

“Yung monopoly dapat tanggalin, kasi kahit di ka crossowner, hawak mo eh,” he added.

Meralco gets 90 percent of its 7000-MW energy requirements of Meralco from power generators and the remaining 10 percent from the WESM. The power utility owns 65 percent of the power supply in the country.

Collusion

In an earlier report presented by Meralco to the Energy committee's hearing, it said that at least nine power plants went on scheduled but extended shutdown and forced outages: Sual, GN Power 2, Sta. Rita Module 20, Sta. Rita Module 30, Ilijan 2, QPPL, Sual 1, Calaca 1, and Masinloc 1.

According to the Energy department, had the plants not shut down along with the Malampaya plant, power prices would not have drastically changed.

ACT Teachers Party-list Rep. Antonio Tinio earlier identified the three companies that allegedly benefited from the price increase in the WESM, particularly two Aboitiz groups and one owned by Mike Valencia.

According to Colmenares, during the scheduled Malampaya plant shutdown, Therma Mobile’s 100-MW power was sold to WESM at P62 per kWh even though it is already technically owned by Meralco.

“Meralco can bid the 100-MW power at zero because they already contracted it. What they did was, they asked Therma Mobile to bid at P62, resulting to jack up prices in WESM,” Colmenares said in a press release.

He also pointed out that the power utility could have dispatched its 1000-MW reserve when several power plants shut down in October and November, but did not do so, resulting in exorbitant power rates.

EPIRA: repeal or review?

On a related note, Citizens Battle Against Corruption (CIBAC) Party-list Rep. Sherwin Tugna said in the same news conference that Congress should revisit the Electricity Power Industry Reform Act (EPIRA,) since it has failed in its original mission to make the power sector competitive, and therefore cheaper for consumers.

“[Pabor ako na] rebisitahin o iamend ang Epira in particular yung automatic pass-on rates sa mga consumers, and also kailangan rebisitahin natin kung ano ba talaga papel ng ERC, ano powers nila, authority and responsibility, with respect to the end consumers and to the power rates kasi it would appear na simula nang pumutok yung issue ng pagtaas ng generation charge, nagtuturuan nang nagtuturuan,” he said.

He also called for the review of the provision on the automatic pass-on rates, and urged members of the House of Representatives to revisit the role of the ERC’s powers, since they seem to be helpless in the face of rising power rates.

“Ultimately ang tanong ng taong bayan, where does the buck stop? Sino ba talaga ang responsible sa bagay na ito? ERC ba ang nagaapruba nito tapos sasabihin nila, ‘wala kaming kakayahan, we don’t have an authority to stop it?’ Ang pinakamagandang mangyari dito, buksan ang amendment ng EPIRA at tingnan ang kapangyarihan ng ERC,” he added.

Meanwhile Ako Bicol Party-list Rep. Rodel Batocabe pushed for the prohibition of cross ownership of both distribution utilities and power generation companies.

“Cross ownership is [essentially] conflict of interest,” Batocabe said. — BM, GMA News