Meralco's defense of self-dealing confirms anti-competitive practices —Bayan Muna

The Manila Electric Company's (Meralco) efforts to defend its alleged attempt to "corner"power supply agreements (PSAs) for its own subsidiaries and affiliates proved that the power distributor is engaged in anti-competitive practices, the Bayan Muna party-list said on Wednesday.

Bayan Muna party-list Rep. Carlos Isagani Zarate and chairman Neri Colmenares made the pronouncement after Meralco claimed that there is no Philippine law or policy that prevents affiliated generation companies (gencos) from participating in the bidding for the supply requirements of distribution utilities.

Zarate pointed out that a House investigation had already found out that Meralco awarded — without bidding — to its own affiliated gencos power supply contracts containing P900 billion in overpriced power rates that Meralco would pay to itself through its affiliated gencos.

“The House investigation caught Meralco with its hands in the cookie jar, yet Meralco is feigning innocence about it,” Zarate said, saying the House inquiry had found the terms of the PSAs "burdensome to consumers."

He said that the Ombudsman had already suspended top Energy Regulatory Commission (ERC) officials for allowing Meralco to award the same PSAs to the Meralco gencos without conducting a bidding under the competitive selection process (CSP).

"Yet Meralco claims that such anti-competitive behavior is not prohibited," Zarate added. "The Ombudsman even found probable cause to charge the same ERC officials for violating the anti-graft law after they extended ‘unwarranted benefits to [Meralco] and other companies by exempting them from the coverage of the CSP requirement'."

Zarate also cited a Supreme Court ruling stopping the award of PSAs and castigating the ERC for a CSP postponement that "unconscionably placed this public purpose in deep freeze for at least 20 years."

‘Revisit past rulings’

Colmenares, for his part, said Meralco should revisit this Supreme Court decision, the Ombudsman’s suspension order, and the results of the House inquiry on the Meralco PSAs. "All these documents uncovered abusive practices that Meralco is not only denying now, but is also trying to perpetuate," he said.

Aside from these, Colmenares said the power distributor should also review the country’s Philippine Competition Law on prohibited actions that substantially prevent, restrict or lessen competition.

Zarate asked Meralco officials “to think about the obligations set by Congress in renewing the company’s franchise to see if overpricing Meralco rates by P1.55 per kilowatt-hour -- as what Meralco tried under the aborted PSAs – conformed with the company’s franchise obligation to get in ‘the least cost manner’ electricity it distributes to its customers."

Zarate also reacted to an earlier statement from Meralco wherein, he said, "it appeared as a foregone conclusion that Meralco’s wholly owned genco subsidiary Atimonan One Energy Inc. (Atimonan One) will start constructing a 1,200-megawatt power plant after one bidding."

As far as the lawmaker was concerned, "“if the outcome for bidding a PSA will be pre-determined, obviously the bidding will all be a charade and we will not allow it."

Colmenares, meanwhile, denied Meralco's claim that the party-list was singling out the power distributor, saying the company was "the one that had been caught discriminating against other gencos in awarding PSAs."

“[Meralco] also feels being singled out for our criticism, but conveniently Meralco hides its singular notoriety in this issue. For instance, it is the only known Philippine distribution utility that figured in an invalidated attempt to award PSAs to itself through its own gencos, so that they can build their own powerplants," he said.

Colmenares said the combined requirements the company awarded to the favored gencos at 3,551 megawatts would be like cornering the electricity requirements of the entire Visayas and Mindanao.

He added that the amount of overpriced charges Meralco would "pick from the pockets of consumers at P900 billion likewise would dwarf the money that supposedly Janet Lim Napoles took from government coffers."

Napoles was charged for being the brains behind the P10-billion pork barrel scam in which Priority Development Assistance Funds of certain lawmakers were allegedly funneled into bogus organizations.

“That’s why we continue to watch over these PSAs to make sure Meralco will not again try to award contracts with overpriced charges that will burden its customers,” Zarate, meanwhile, said.

‘No factual, legal basis’

Meralco spokesperson Joe Zaldarriaga had already said Bayan Muna's statements on the matter had no factual or legal basis.

“There is no prohibition in the law, the DOE guidelines and even in the SC decision that prevent affiliate generation companies from participating in the bidding for power supply requirements of distribution companies,” Zaldarriaga emphasized.

The Meralco official claimed the party-list group's tirade against their company was aimed at stopping the construction of new power plants to put the Department of Energy and the administration of President Duterte "in a bad light." — Margaret Claire Layug/MDM, GMA News