Results of power rate hike probe out by January

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Monday, December 16, 2013

ALLEGATIONS of collusion among several power firms to jack up electricity rates for Metro Manila and nearby provinces may be upheld or rejected by a unit in the Department of Justice (DOJ) by January next year.

Justice Secretary Leila de Lima said the DOJ Office for Competition will come up with a report and recommendation in coordination with the Department of Energy (DOE).

The DOJ chief ordered the investigation even before receiving the letter-complaint filed by a group of lawmakers and activists on Monday.

“We would like to invite the DOE for this holistic inquiry to state their take on the matter. Are they convinced that there is an alleged collusion? These are very serious allegations and it has a big impact on public welfare, that is why the Office for Competition should be thorough in handling this particularly inquiry,” she told reporters.

De Lima said power firms might be asked to explain their side.

“In that report, I would be expecting several recommendations like possible filing of cases, recommendations to Congress for passing of laws or amending existing laws,” she said.

Created under Executive Order 45 issued in 2011, the Office for Competition may look into possible violations of laws prohibiting cartelization, monopolies, or combinations in restraint of trade as defined in competition laws.

Specifically, the group led by Akbayan Representatives Walden Bello and Barry Gutierrez said Manila Electric Company (Meralco), First Gas Power Corp., San Miguel Corp., Kepco Philippines, Aboitiz Power, Team Energy Corp., AES Philippines and DMCI Holdings, Inc. must be investigated after their plants went into simultaneous and unscheduled shutdown.

This resulted in more load deficits in the Luzon grid and which forced Meralco, the country’s largest power distributor boasting 4.7 million customers, to buy a more expensive power from the Wholesale Electricity Spot Market (WESM).

Meralco also cited the maintenance shutdown of the Malampaya natural gas plant off Palawan from November 11 to December 10 as reason for the rate hike of P4.15 per kilowatt hour (kwh) on a staggered basis, which was approved by the Energy Regulatory Commission (ERC) last December 9.

The group was suspicious, saying the unscheduled power shutdowns and Meralco’s claim that the Malampaya upkeep was unexpected “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.”

Because of the rate hike, consumers will pay an additional P2.41 per kwh in their December bill, P1.21 per kwh in their February 2014 bill and P0.53 per kwh in March.

The group said higher power rates can only add to the economic burden of end-users and consumers who are also facing increases in prices of basic commodities like liquefied petroleum gas and train fares. (Sunnex)

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