Meralco tells SC it did its best to 'cushion' impact of electricity rate hike

In defense of its controversial P4.14 per kilowatt-hour rate increase, the Manila Electric Co. (Meralco) on Tuesday told 14 magistrates of the Supreme Court it tried everything to soften the impact of higher electricity rates when power suppliers went on maintenance shutdown almost at the same time late last year.
 

At the resumption of oral arguments at the high court, Meralco lawyers insisted the petitioners opposing the rate increase should have first sought refuge under the Energy Regulatory Commission (ERC) instead of running directly to the SC.

 

Victor Lazatin, legal counsel for Meralco, said the power distributor was "proactive in seeking and undertaking mitigating measures to cushion the impact of the scheduled shutdowns."

 

Meralco claimed it was forced to buy expensive electricity from WESM – the spot market – to meet the 2,700 megawatts (MW) in peak load demand deficit for the Luzon grid since its major source, the Malampaya gas-to-power platform, went on maintenance shutdown from November 10 to December 11.

 

Among the steps it took was agreeing to run the 420 MW Ilijan Block 1 and the 1,000 MW Sta. Rita to help patch the supply shortfall.

 

Meralco said it also asked two other power plants, whose scheduled shutdown would overlap with Malampaya, to delay their maintenance, but ended up convincing only one.

 

"Notwithstanding Meralco's efforts, Meralco sourced more power from WESM... because of the extended shutdowns and forced outages during the months of November and December 2013," Lazatin said.

 

In a final attempt to soften the impact of the supply shortfall, Meralco said it decided to implement the newly adjusted rates on a staggered basis.

 

Despite the higher generation charge, Lazatin said the distribution charge it imposed on its customers remained unchanged. Meralco had been blaming the generation companies for the rate increase, saying the additional charges were merely "pass-through" charges coming from higher generation charges.

 

"Meralco's proposal to stagger the increase was to cushion the rate impact to its customers with no benefit to itself," Lazatin said.

 

The lawyer insisted that the petitioners have no clear legal right to stop the collection of these pass-through charges and its staggered collection. "There is no irreparable damage or injury," he said.

 

Meanwhile, another Meralco legal counsel, retired Supreme Court Associate Justice Florentino Feliciano, said the petitions contesting the rate hike can be decided upon even without touching on the constitutionality of portions of the Electric Power Industry Reform Act (EPIRA) of 2001.

 

The petitioners want the high court to declare Section 6 and 29 of the EPIRA as unconstitutional. The two sections of the law state that prices charged by generation companies and electricity suppliers are not subjected to ERC regulation. – VS/KBK, GMA News