SC asked to stop ERC from approving 20-yr. agreements

by Rey G. Panaligan – November 8, 2016, 10:00 PM

from Manila Bulletin

The Supreme Court (SC) was asked yesterday to stop the Energy Regulatory Commission (ERC) from approving a 20-year power supply agreements (PSAs) between the Manila Electric Company (Meralco) and several companies involving 3,551 megawatts.

In a petition filed by the Alyansa Para sa Bagong Pilipinas, Inc. (ABP), the SC was also asked to issue a temporary restraining order (TRO) to stop the approval of the PSAs.

If approved by the ERC, ABP stressed that more than 5.8 million Meralco consumers would be burdened by the PSAs for 20 years.

“The resulting irreparable damage to the consumers arising from the 20-year contracts would easily translate to R12.44 billion a year that would be mercilessly hung on the necks of consumers like an albatross if these midnight  power supply agreements are allowed to evade the law,” it said.

“It will also sabotage the promotion of free and open market competition, and preclude the competition operation of the spot market,” it added.

Named as respondents in the petition aside from the ERC and Meralco were the Department of Energy (DOE), Meralco’s sister generation companies Central Luzon Premiere Power Corporation, St. Raphael Power Generation Corporation, Panay Energy Development Corporation, Mariveles Power Generation Corporation, Global Luzon Energy Development Corporation, Atimonan One Energy, Inc., Redondo Peninsula Energy, Inc., and the Philippine Competition Commission (PCC).

ABP asked the SC to declare null and void ERC Resolution No. 1, Series of 2016. which extended from October 2015 to April 2016 the effectivity of ERC Resolution No. 13, Series of 2015, that  directs all distribution utilities to conduct competitive selection process (CSP) in the procurement of their supply to the captive market.

It said ERC’s issuance of Resolution No. 1 was a grave abuse of discretion on the part of the regulatory agency which is mandated under the Republic Act No.  9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) to promote competition, encourage market development, ensure customer choice and penalize abuse of market power.

With the extension, ABP said Meralco was able to enter into negotiated PSAs with its affiliated generation companies without conducting CSP.