ERC asked to stop Meralco power rate hike pending probe on 'collusion'

The Energy Regulatory Commission should suspend the Meralco's rate hike while the government is investigating the possibility that power producers conspiring to earn more from the electricity spot market.

Senate President Pro-Tempore Ralph Recto made this proposal on Wednesday during a Senate energy committee probe on the Meralco power rate hike.

"Hindi po ba tama lamang na habang pinag-aaralan pa ito ay suspendihin muna ang [implementasyon ng] pagtaas?" Recto told ERC officials during the investigation.

He said that it will be only "fair" not to pass the burden of paying high power rates to Meralco consumers, when there is a possibility that power producers violated the law.

ERC chairwoman Zenaida Cruz-Ducut however did not give a categorical answer to Recto's proposal. She only said her agency will still "study" if suspending the power rate hike is "feasible."

Last week, the ERC allowed Meralco to increase electricity rates by P4.15/kWh in three tranches from December 2013 to March 2014.

During a hearing at the House of Representatives last week, the Department of Energy said it is looking at the possibility that independent power suppliers colluded to simultaneously shut down their power plants, which might have led to the Meralco power rate hike.

On Monday, several groups led by Akbayan Rep. Walden Bello, asked the Department of Justice to investigate the impending P4.15.kWh increase.

In a letter-complaint addressed to Justice Secretary Leila de Lima, the groups said the DOJ as the country's "competition authority" should investigate Meralco and other power plants in the country for possible violations of laws prohibiting cartelization, monopolies and combinations in restraint of trade as defined in competition laws.
 
They claimed Meralco and the Energy Regulatory Commission, which approved the price hike last December 9, met and green-lighted the increase without any public hearing or investigation for possible market abuse. The groups claimed the hike would be "the highest in history."

But Meralco claimed it was forced to buy expensive electricity from the Wholesale Electricity Spot Market during the scheduled Malampaya shutdown just to meet the 2,700-megawatt deficit of the electricity peak load demand of Luzon.
 
The P4.15-increase will be divided into three tranches consisting of a P2 raise in December, P1 in February, and P0.44 in March, along with the corresponding taxes and service charges.
 
But the groups said Meralco's rate hike due to the Malampaya shut down was much higher – three times more – than the expected increase when other power plants went on a simultaneous and unscheduled shutdown during the same period.
 
The complaining groups said Meralco's decision to buy expensive electricity from WESM was "information that point to a contrived scenario of extreme short-term shortage of electricity for the purpose of raising the price of electricity beyond what it would cost to generate it." — Andreo Calonzo /LBG, GMA News