SC halts power rate hike

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Monday, December 23, 2013

MANILA (Updated) -- Customers of power distributor Manila Electric Company (Meralco) can cheer this holiday season after the Supreme Court (SC) has stopped the firm from collecting higher generation charges starting this month.

The temporary restraining order (TRO) issued by Chief Justice Maria Lourdes Sereno on behalf of the SC en banc on Monday is good for 60 days. The stay order may either be affirmed or rejected by the justices on their first session in January 2014.

An oral argument was also set on January 21, 2014 to give the petitioners and Meralco and the Energy Regulatory Commission (ERC) to explain their positions on the P4.15-rate increase.

ERC and Meralco, meanwhile, were given until January 8, 2014 to submit their comment to the petitions lodged by militant lawmakers under the Makabayan bloc and electric consumers and homeowners last week.

The petitioners said ERC abused its power when it allowed the rate hike on December 9 without first requiring publication, notice or hearing involving Meralco's nearly five million customers.

The adjustment would have been implemented in three tranches.

Under the ERC-approved scheme, consumers will pay an additional P2.41 per kilowatt hour (kwh) in December, P1.21 in February 2014 and P0.53 in March.

Meralco cited the month-long maintenance shutdown of the Malampaya gas facility and the simultaneous outage of some power plants as basis for buying expensive power from the Wholesale Electricity Spot Market (WESM).

Senators consider the TRO as a victory for the Filipino people.

Senator Antonio Trillanes IV said Filipinos should sustain the pressure in order that the freeze would become permanent.

"It is a triumph for the consumers. In the meantime, we shall find ways to avert future spikes in power rates. We will also continue with the investigation and the auditing to make sure we are not being manipulated by Manila Electric Company," said Trillanes, as he insisted on the need to maintain opposition to the "oppressive" power rate hike.

Earlier, Senator Francis Escudero said only the SC can prevent the imposition of the Meralco's power rate hike and the TRO is the answer.

He admitted that it was hard to reverse the decision of the ERC.

While the ERC might be in a position to recall its decision, Escudero said that this will have to go through a tedious process.

"The TRO is the most doable (option)," he said.

Senator Sergio Osmena III, chairman of the Senate committee on energy, expressed happiness over the SC injunction on the rate spikes.

The Aquino administration must move much faster to amend Presidential Decree (PD) 910 to allow government to spend P10 billion to cushion the rate hikes, he said. PD 910 defines where the Malampaya Fund may be used, which is for energy and energy related projects.

Trillanes recently filed a bill seeking to amend PD 910 to authorize the use of the Malampaya fund to subsidize energy consumers during situations of "market failure."

Market failure, Trillanes said, is a state or condition where market forces are affected by extraneous circumstances thereby rendering the market inefficient.

Senate President Pro Tempore Ralph Recto is in favor of amending PD 910 in order to decide the best way to utilize resources to benefit the people and institutionalize its proper use.

Senator Vicente Sotto III, however, noted the need to review or even repeal the Electric Power Industry Reform Act (Epira), saying the law does not seem to be serving its purpose of protecting consumers from huge increases of electricity rates of distribution companies.

The huge hike will cost an additional P830 to the monthly billing of consumers using an average of 200 kHw.

Such increase, Escudero said, is clearly an abuse of the automatic increase provision granted to Meralco by the ERC.

"Meralco cannot justify its increase with the generation cost rationale. If they are too quick to impose a price hike, they must also be this quick or quicker to refund the consumers and give us our rebates in the shortest period of time. It should be quid pro quo (something for something)," he said.

Senator Nancy Binay said the TRO on the power rate hike will provide a relief for the consumers. "Napaka-agang pamasko ito pra sa ating mga kababyan, Merry Christmas" she said. (With a report from Camille P. Balagtas/Sunnex)

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