Palace: Meralco not off the hook after ERC blames WESM for higher power rates

Despite an Energy Regulatory Commission (ERC) ruling that power rates were traded unreasonably high in the spot market late last year, a Malacañang official said Wednesday the Manila Electric Company (Meralco) isn't off the hook yet for seeking record-high rates from its more than 5.1 million customers.

 

"There is a pending case before the Supreme Court on Meralco. So, let's wait for that. There's no definitive answer on that point," presidential spokesperson Edwin Lacierda told reporters in a press conference at the Palace.

 

Parallel investigations are still ongoing on the alleged collusion among energy companies to impose  a power rate increase, the Palace official said.

 

He made the statement after ERC said prices at the Wholesale Electricity Spot Market (WESM) during most of the fourth quarter of 2013 were not "reasonable, rational, and competitive." The regulator likewise ordered WESM operator Philippine Electricity Market Corporation (PEMC) to recompute and issue regulated prices from Oct. 26 to Dec. 25.

 

PEMC was ordered to revise WESM bills in November and December covering power distribution in Luzon and to immediately settle the difference. The order did not include Meralco.

 

Meralco will not receive the November 2013 WESM bill due to a temporary restraining order – which was extended until April 22, 2014 – issued by the Supreme Court.

 

Meralco earlier claimed the high cost of electricity on the WESM trading floor for buying and selling electricity prompted the power distribution company to impose a power rate increase that is now being contested before the high court.

 

The spike in power prices was attributed to the month-long maintenance shutdown of the Malampaya gas-to-power facility and the forced outage of other major power plants in Luzon.

 

Wednesday, however, Lacierda clarified the ERC approval for Meralco to implement a record-high increase in electricity rates was subject to post-verification proceedings.

 

"When they issued that letter... they were subject to post verification. They verified it and consistent with the clamor from the people on the increased rates... it gave them impetus to look further into [it]," he said.

 

"[Now] the ERC ruled and using the police power of the state, protected the general welfare of the people," he added. – VS, GMA News