Gov't urged to tighten grip on energy industry

by RG Cruz, ABS-CBN News

Posted at Jan 17 2014 12:45 AM | Updated as of Jan 17 2014 08:45 AM

MANILA (UPDATED) - Lawmakers want government to tighten its regulation of the electricity industry, following the attempted increase of electric rates by distribution utility Manila Electric Co. (Meralco).

Bayan Muna Rep. Neri Colmenares wants to abolish the wholesale electricity spot market or WESM, which was created by the Electric Power Industry Reform Act (EPIRA) to help boost competition within the industry.

Colmenares also wants the state to buy back some power companies so that it can control the industry.

Colmenares said the government’s Energy Regulatory Commission should not have allowed the increase since there appears to be evidence of collusion and price manipulation in the WESM, where Meralco sources its electricity supply.

In a separate press release, Colmenares and fellow Bayan Muna Rep. Carlos Zarate accused Meralco of dictating the power rate hike and manipulating the market price of electricity, particularly during November and December 2013.

Bayan Muna claimed that based on documents obtained from the WESM, Therma Mobile (2TMO in the documents) entered P62.00 bids at the spot market nine times in November and 59 times in December, even if the contracted price between Meralco and Thermo Mobile is just P8.65/kWh to jack up the price of electricity.

However, Therma Mobile declared that it was Meralco which ordered it to do so.

“AboitizPower President and CEO Erramon Aboitiz, who owns Therma Mobile, while admitting that Therma Mobile did make the very high bids, passed the buck to Meralco by saying that under TMO’s capacity-based contract, Meralco has full control of the use of the 100MW from TMO, including pricing and volume offers to the WESM. 100MW of its capacity was only utilized by Meralco starting November 12, 2013. The balance of 130MW will be available by mid 2014 once the connection line is available. TMO is a mere implementor of Meralco’s price and volume offers to the spot market or WESM.”

For his part, CIBAC party list Rep. Sherwin Tugna pointed out that since the public is dependent on electricity, “it should be a highly regulated industry.”

Tugna also wants to prohibit cross-ownership in the energy industry -- which is when generation companies and transmission or distribution facilities are owned by the same company.

Tugna also wants to revisit the EPIRA and the ERC’s powers.

Ako Bicol party-list Rep. Rodel Batocabe, meanwhile, noted there are very few players in the power industry.

He also backed a ban on cross-ownership but he is against government returning to the power industry as a player, noting how the National Power Corporation went bankrupt.

Colmenares said he prefers to wait for a ruling by the Supreme Court on petitions assailing the legality of the power rate hike, before looking at possible charges against Meralco.

Colmenares’ Bayan Muna is one of the petitioners in the cases assailing the legality of the rate hike, which is scheduled for oral arguments before the High Court on January 21.

The SC stopped a power rate hike that was supposed to be implemented by Meralco in December due to an increase in power generation charges brought about by some shutdowns of power plants.