‘Stop power rate hike’

By Rey E. RequejoManila Standard Online_Dec 23, 2013

Solons ask High Court to scrap Meralco move

LAWMAKERS on Thursday asked the Supreme Court to stop Manila Electric Co. from jacking up electricity rates by P4.15 per kilowatt hour, the highest increase in the country’s history.

In their petition, Bayan Muna Reps. Neri Colmenares and Carlos Isagani Zarate; Gabriela Women’s Party Reps. Luz Ilagan and Emmi de Jesus; ACT Teachers Party-list Rep. Antonio Tinio; and Kabataan Party-list Rep. Terry Ridon sought the immediate issuance of temporary restraining order, arguing that the rate increase come at the worst time possible, with the country still reeling from the effects of super typhoon Yolanda.

The groups also asked the Court to nullify the Energy Regulatory Commission approval of Meralco’s rate hike.

They also appealed to the justices to declare as unconstitutional a provision of the Electric Power Industry Reform Act or EPIRA of 2001 which declared that the power generation and supply sectors were not public utilities, and therefore not subject to regulation by the ERC.

In its letter to the ERC dated Dec. 5, Meralco said it would have to increase rates by P4.15 per kWh for residential consumers because it needed to buy more expensive power following the maintenance shutdown of the Malampaya gas field.

On Dec. 9, the ERC approved Meralco’s request.

In approving the increase without the benefit of a public hearing, which is required by law, the ERC committed grave abuse of discretion, the lawmakers said.

EPIRA, the petitioners added, was aimed at promoting competition and penalizing abuses of market power in a restructured electricity industry.

Given “the suspiciously sudden and simultaneous shutdown of various power plants” to coincide with the announced Malampaya maintenance, the ERC should not have approved Meralco’s petition barely three days from its submission.

The petitioners accused the ERC of reneging on its duty to protect the public from anti-competitive practices and market abuse when it approved the P4.15 increase despite clear indications of irregularity in the simultaneous planned and unplanned shutdowns, the hefty spike of electricity prices that Meralco sought.

“It is really mind boggling that the ERC hastily approved Meralco’s letter request,” the petitioners said, adding that the commission’s actions were also collusion with vested oil interests.

In the Court of Appeals, the Special 16th Division junked a petition filed by the Foundation for Economic Freedom seeking to stop the ERC from hearing and deciding on a petition filed by the National Renewable Energy Board, which is expected to increase power rates to consumers.

Associate Justice Pedro Corales ruled that the petition was moot and academic because the ERC had already ruled on NREB’s petition in October and November.

The Appeals Court also ruled that the ERC had not committed grave abuse in approving NREB’s petition.

The NREB filed the petition with the ERC on behalf of the renewable energy suppliers to adopt a feed-in-tariff for electricity generated from biomass, ocean, run-off-river hydropower, solar and wind energy resources.

The tax on electricity consumers for a period of 20 years would generate money for a subsidy to encourage the development of renewable sources of energy.

The FEF had warned that the taxes from electricity consumers nationwide would reach P11 billion annually for the next 20 years collectible through their monthly billings.

The Palace on Thursday said it was determined “to uphold and protect the citizens’ welfare” and to carry out its mandate to prevent anti-competitive and market abuse practices.”

“In view of this, we support the current Senate inquiry into the recent power rate adjustments. This runs parallel to the on-going investigation of the tripartite committee composed of the Department of Energy, Energy Regulatory Commission, and the Philippine Electricity Market Corporation, as well as that of the Justice Department’s Office of Competition,” Communications Secretary Herminio Coloma Jr. said in a press briefing.

Coloma said the Aquino administration hoped that “the Senate inquiry will also lead to concrete proposals on how existing laws can be improved so that the protection of consumer welfare will be assured.”

Senate President Frankllin Drilon on Thursday said if collusion is proved in the recent rate hikes, the appropriate criminal charges would be filed.

Also on Thursday, a labor group criticized Senator Sergio Osmena III for concluding publicly that there was no collusion among power generating companies and Meralco on the rate hike, pre-empting the investigtions by the Energy and Justice departments.

“Serge is a consistent supporter of power industry players since his sponsorship of the EPIRA Law which ushered in the era of high electricity rates to his defense of Meralco’s gargantuan rate hike,” said Wilson Fortaleza of the Partido ng Manggagawa.

Fortaleza was one of the signatories to the complaint against Meralco and generation companies lodged by groups last Monday with the Justice Departments Office for Competition.

Justice Secretary Leila de Lima vowed to come up with the findings by January next year. – With Macon Ramos-Araneta, Ronald O. Reyes and Vito Barcelo

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EastGreenfields post note on NREB petition for power rate increase.

The power rate is expected to increase pending on the implementation of Renewable FIT rates. This is inevitable since Green sources has to be funded by payments from FIT. 

At first look, the FIT will be an increase in each consumers billing but scrutinizing it further will reveal that FIT rates are actually in parity or even lower (for Biomass), see table below:

Solar FIT: P9.68 / kW-hr
Wind FIT: P8.53 / kW-hr
RoR Hydro FIT: P5.90 / kW-hr
Biomass FIT:P6.63 / kW-hr

These rates are not going to be demanded from all grid consumers but rather will be computed and blended with the mixed generation rates, in proportion to it's contribution.