Meralco, other power suppliers liable for market abuse, says ERC IU

The Manila Electric Co. (Meralco) and 12 other power suppliers should be held liable for market abuse in connection with the record power rate hike in December 2013, the Energy Regulatory Commission (ERC) Investigating Unit alleged on Tuesday. 

 

The ERC IU is filing a case against the power suppliers before the commission. The suppliers may be meted a penalties ranging from P50,000 to P50 million. 

 

Those liable for supposedly manipulating the market include PSALM as operator of the Malaya and Casecnan Hydroelectric power plants, Panasia Energy Holdings Inc. (Limay combined cycle power plant), Therma Mobile Inc. and Meralco (Therma Mobile-TMO), 1590 Electric Corp. (Bauang Diesel), and CIP II Power Corp. (CIP II Bunker C-Fired power plant).

 

Also to be charged are Trans-Asia Power Generation Corp. as operator of TAPGC Diesel power plant, AP Renewables Inc. (Makban geothermal), Udenna Management Resources Corp. (Subic Diesel), Strategic Power Development Corp. (San Roque Hydroelectric power plant), GN Power Mariveles Coal Plant Ltd. Co. (Mariveles), and SEM-Calaca Power Corp. (Calaca coal-fired thermal plant). 

 

In 2013, the ERC allowed Meralco to increase electricity rates by a record P4.15 per kilowatt hour due a lack of power supply as the Malampaya gas-to-power facility went on a maintenance shutdown as well as the simultaneous and unscheduled shutdowns of other power plants. 

 

With Malampaya out of service, Meralco claimed it was compelled to source power from the Wholesale Electricity Spot Market (WESM) at higher rates.

SC stops rate hike

 

WESM operator Philippine Electricity Market Corp. (PEMC) earlier imposed a P239.4-million fine on TMO for withholding capacity that prompted Meralco to ask for a power rate increase. 

 

The AboitizPower subsidiary said the four bunker-fired power barges in Navotas, Manila – which it took over in November 2013 – and its 115 kilovolt (kV) transmission facilities have not been operating for at least five years and needed rehabilitation.

Despite the ongoing rehabilitation of the power barges and transmission lines, the company was still able to “safely, reliably and consistently” supply Meralco with 100 megawatts back then, TMO said. 

 

Higher electricity rates were supposed to be implemented in three tranches from December 2013 to March 2014 but the Supreme Court indefinitely stopped the increase. 

 

The ERC unit did not specify whether there was collusion among the power suppliers to jack up electricity prices.

 

In a text message to GMA News Online, William Pamintuan, Meralco legal chief, denied the latest findings of the ERC. 

 

"While we have not yet been furnished with a copy of the ERC IU report, Meralco maintains in its assertion which it had articulated before the ERC, Congress and the Supreme Court, that it had acted strictly in accordance with the decision of the ERC approving the power supply agreement with TMO which took into account Meralco's least cost obligation to its consumers," Pamintuan said. 

 

"The records will bear that Meralco complied with applicable market rules and did not engage in any anti-competitive behavior in its supply contract with TMO," he added. – VS, GMA News