Distribution firms join Meralco: Rate adjustments justified

By Ira Pedrasa, ABS-CBNnews.com

Posted at Jan 20 2014 05:01 PM | Updated as of Jan 21 2014 01:01 AM

MANILA - Major distribution utilities across the country are now up in arms with the Manila Electric Co. (Meralco) in seeking to have a Supreme Court halt order quashed.

Power consumers, on the other hand, will picket the high court Tuesday as it hears oral arguments on the legality of Meralco’s power rate hike.

Militant groups, for their part, have scheduled a so-called “Blackout Protest” on Jan. 21 to denounce the alleged inaction of the Aquino administration to protect the rights of consumers.

In a phone interview, Private Electricity Power Operators Association (Pepoa) President Ranulfo Ocampo said the group has filed a motion to intervene “because we are also affected, we should also be heard. We are seeking to have the petition dismissed and the [temporary restraining order] lifted.”

PEPOA is an association of 18 major distribution utilities outside the Meralco franchise area.

Ocampo, who will represent the group in the oral arguments, said they are particularly questioning an appeal to have the automatic adjustment of generation rates (AGRA) dropped.

“If the high court disallows this, there will be a tedious application process. Any delay in the implementation of the [pass on rates] will affect our business,” he said.

In the end, the consumers themselves will have to pay more because of the “carrying charge” or the interests from the increase in rates that was deferred, he said.

Meralco earlier said it did not violate the people’s rights to due process in implementing the rate hike.

“Contrary to petitioners’ contentions, the automatic adjustment scheme as implemented by the AGRA rules and EPIRA IRR (Electric Power Industry Reform Act implementing rules and regulations) amendment comply with the requirement of due process,” Meralco said.

The rates are then subject to a post-verification by the regulator, the Energy Regulatory Commission.
Meralco was already in the midst of implementing the rate hike until it was stopped by the SC in December.

Meralco earlier announced the rate increase, which was to be imposed in three tranches, was a result of the scheduled shutdown of the Malampaya gas plant.

The shutdown resulted in Meralco buying more expensive electricity from the Wholesale Electricity Spot Market to cover for the deficit in its jurisdiction.

The distribution firm later warned of rotating blackouts in case it is barred permanently from implementing the rate hike.

Meanwhile, the militant groups presented today the lawyers who will be representing them during the oral arguments.

Lawyer Carlos Isagani Zarate will push to have the halt order become permanent, while Bayan Muna Rep. Neri Colmenares will ask the SC to dismiss several provisions in the EPIRA that was used by Meralco to adjust its rates.

The stakeholders were given 30 minutes each to defend their cases, except for Meralco that has 40 minutes.

In an advisory, the high court also ordered the Energy Secretary, ERC chairperson, and Philippine Electricity Market Corp. president to attend the oral arguments because of the complexity of the issue.

“When called upon, they are expected to be able to competently and completely answer questions related to, among others, their processes and procedures,” the SC said.