SC to hear petitions vs Meralco rate hike today

By Edu Punay, The Philippine Star

Posted at Jan 21 2014 08:47 AM | Updated as of Jan 21 2014 04:47 PM

MANILA, Philippines - The Supreme Court (SC) is set to hear today petitions questioning the legality of Manila Electric Company (Meralco)’s P4.15 per kilowatt-hour rate increase.

First to face the justices are lawyers of two petitioners, militant groups led by Bayan Muna Rep. Neri Colmenares and consumer groups led by National Association of Electricity Consumers for Reforms (Nasecore).

They will be given 30 minutes to present their arguments based on the eight-point guidelines issued by the high court last week.

The counsels for petitioners will face interpellation by members of the SC.

Meralco’s lawyers, led by SC Justice Antonio Eduardo Nachura, will be given 40 minutes to present their defense.

The government, particularly the Office of the Solicitor General that represents the Department of Energy (DOE) and Energy Regulatory Commission (ERC), will explain its approval of the power rate hike within 30 minutes.

Intervenors – a group of militants led by Anakpawis party-list and former Iloilo Rep. Augusto Syjuco – will be given 30 minutes to present their arguments to be followed by other respondents, including the Philippine Electricity Market Corp. (PEMC).

Both petitioners and respondents were told to argue whether the ERC violated the consumers’ right to due process and a provision in the Electric Power Industry Reform Act (EPIRA) requiring it to protect the public from market abuse; whether or not the amendment to Section 4(e), Rule 3 of the EPIRA law’s Implementing Rules and Regulations which allows automatic rate adjustments or increases to recover generation cost violates due process of law, and whether or not the ERC resolution allowing rate adjustments proposed by Meralco last Dec. 9 is valid.

They are also expected to tackle whether the 60-day temporary restraining order issued against Meralco should be lifted and if refund can be granted.

The high court had directed Energy Secretary Carlos Jericho Petilla, ERC chair Zenaida Ducut and PEMC president Melinda Ocampo to attend the hearing.

The petitioners alleged that their constitutional right to due process was violated when the ERC approved the price adjustment without conducting public hearings.

They questioned why the ERC, which is under the DOE, approved the rate increase last Dec. 9 or just four days after Meralco submitted its proposal.

The groups said the public was not duly informed about the adjustment since there was no publication.

Nasecore, in its petition, urged the SC to order the creation of a committee, with the Commission on Audit as head, to conduct an automatic audit on electricity rate adjustments imposed by Meralco since 2004.

Meralco had imposed the first tranche of the rate increase last December in the amount of P2.41/kwh.

Based on the ERC’s order, February and March bills will register increases of P1.21/kwh and P0.53/kwh, respectively.

‘Noy can oust ERC chief’

President Aquino has the power to remove ERC chief Ducut even if she has a fixed term of office, Akbayan Rep. Ibarra Gutierrez said yesterday.

“The President can remove her from office. The Constitution provides that the President shall have control of all the executive departments, bureaus and offices to ensure efficiency in the government,” he said.

“The President also has the power to directly investigate graft cases as well as grave negligence of duty of presidential appointees in the executive department,” he added.

Gutierrez, who is a lawyer and former Malacañang bureaucrat, said that using these broad powers, Aquino could find ways of ousting Ducut for graft or incompetence, or both.

He pointed out that the Department of Justice has filed a graft case against the ERC chief for her allegedly acting as an agent of former congressmen who are accused of misusing their pork barrel funds.

Protests vs power rate hike

Workers took the streets yesterday to demand a stop in power rate hikes.

Members of labor coalition Nagkaisa held a picket in front of the high court and called on the judiciary to restrain Meralco from increasing power rates.

“We pray that the SC justices deliver us from a decade-old fraud and industry blackmail,” Nagkaisa said, referring to alleged abuses committed under the EPIRA.

The militant labor group Kilusang Mayo Uno (KMU) also staged a mass action yesterday to call for the junking of the EPIRA law and passage of a measure granting a P125 legislated wage hike.

They urged the public to join today’s blackout protest organized by labor groups to oppose the power rate hike being pushed by Meralco.

Scrap VAT on power

Scrapping the 12 percent value-added tax (VAT) on power will not result in massive revenue losses for the government but will generate more taxes, Marikina City Rep. Romero Quimbo said yesterday.

Quimbo, chairman of the House ways and means committee, was responding to the warning of Bureau of Internal Revenue Commissioner Kim Henares that scrapping the VAT on power would result in a P30-billion annual revenue loss for the government.

The lawmaker has been pushing for the scrapping of the VAT on power to lower electricity rates to unburden households and lessen the cost of doing business in the country.

“Removing the VAT on power could be considered as a sound investment move for the economy, you unburden families and help them save and have more purchasing power, while the businesses would free up costs for expansion or capital,” Quimbo said.

Meanwhile, a provincial board member in Pangasinan yesterday slammed the officials of the Pangasinan III Electric Cooperative Inc. (Panelco III) for increasing power rates without public consultation.

Sixth district Board Member Ranjit Ramos Shahani questioned the power rate hike of P5.63/kwh in Panelco’s December 2013 billing.

He threatened to file a case in court and ask for a temporary restraining order to stop its implementation. – With Jess Diaz, Mayen Jaymalin, Paolo Romero, Eva Visperas