DOE wants Meralco to appeal hike TRO

By Iris Gonzales, The Philippine Star

Posted at Dec 28 2013 01:41 AM | Updated as of Dec 28 2013 09:41 AM

MANILA, Philippines - Energy Secretary Carlos Jericho Petilla wants the Manila Electric Co. (Meralco) to appeal the Supreme Court's 60-day temporary restraining order (TRO) on the P4.15 per kilowatt-hour electricity rate increase, saying the power distributor would inevitably have to collect higher rates to recover cost and ensure smooth operations.

“How do we deal with the TRO? We respect it but I am asking Meralco to appeal it because I do not want them to borrow to pay off fuel costs because that would carry interest charges,” Petilla said Thursday night after meeting with officials of Meralco and power generators.

He said Meralco would just have to collect higher rates in the future from its 5.3 million customers if it is prevented from doing so now.

“It may disrupt service if this is really prolonged. However, we are making sure at our level that even without the collection, we will avert a situation wherein services are disrupted,” Petilla told reporters when asked if stopping the rate hike would result in power service interruption.

Only Meralco and the Energy Regulatory Commission can appeal the SC’s TRO as they are the respondents in petitions against the rate hike.

The SC issued the TRO last Dec. 23.

The generation charge is the cost of power purchased by Meralco for the previous month’s supply. It is the biggest component of electricity cost, accounting for 65 percent.

Petilla said that if Meralco is unable to collect from its 5.3 million customers, it might have to tap loans to pay off its suppliers, at least for the cost of fuel.

“If Meralco cannot collect, it may have to borrow money and if it borrows, there will be interest, which may add to electricity cost, so that’s the reason why I want Meralco to appeal the TRO so that there would be no interest cost,” Petilla said.

Meralco has roughly P9 billion in payables to energy suppliers, of which P6 billion is due to the Philippine Electricity Market Corp. (PEMC), operator of the

Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

PEMC gave Meralco a reprieve by agreeing to collect only P3.8 billion while the TRO is in effect. The agreement was arrived at after a meeting Thursday between Meralco and PEMC as well as representatives of power generators.

As this developed, Meralco is preparing to refund some of its customers through adjustments in subsequent bills.

“For bills coming out starting Dec. 23 to end-December, bills will already comply with the SC-TRO, using generation charge of P5.67per kwh. For customers who already paid before the SC TRO came out, adjustments will be made in subsequent bills in accordance with the final SC decision,” Meralco spokesperson Joe Zaldarriaga said.

On the other hand, those who have not received their bills would be informed individually of their options, he said.

Meanwhile, another party-list group and its militant supporters have joined the bandwagon petitioning the SC to stop Meralco’s rate hike bid.

Anakpawis party-list and its affiliate groups filed the petition days after the SC issued a 60-day TRO on the rate increase.

Unlike earlier petitions, the new one named the Office of the Executive Secretary as respondent.

Anakpawis’ co-petitioners were Kilusang Magbubukid ng Pilipinas (KMP), Kilusang Mayo Uno (KMU), and Kalipunan ng Damayang Mahihirap (Kadamay) in the petition.

“It is a must to state that this power rate hike is unreasonable and unaffordable for consumers, especially at this time when the entire country is still reeling from the damaging effects of super typhoon Yolanda and other calamities,” the petitioners said.

“More importantly, it was issued with grave abuse of discretion amounting to lack or excess of jurisdiction.” With Edu Punay