House to ERC: hasten review of Meralco deals

Members of the House committees on good government and public accountability chaired by Rep. Johnny Pimentel (2nd District, Surigao del Sur) and energy represented by its vice-chairman Rep. Carlos Roman Uybarreta (Party-list, 1-CARE have asked the Energy Regulatory Commission (ERC) to compel its technical working group (TWG) to expedite the review and evaluation of the deals entered into by the Manila Electric Company (Meralco) so that all questions and suspicions about the contracts would now be addressed.

The lawmakers sought the expeditious review by the ERC TWG during the joint hearing of the committee on the basis of House Resolution 566 filed by Rep. Carlos Isagani Zarate (Party-list, Bayan Muna), seeking an inquiry into the alleged midnight deals of the Meralco-affiliated generation companies and the ERC which may be disadvantageous to the public and cause power rate hikes.

Rep. Gil Acosta (3rd District, Palawan) questioned the slow review of the ERC TWG on the matter.

According to Acosta, the ERC commissioners are empowered by law to supervise its TWG so it can fast -track the review of the Meralco deals.

Kaya nga andiyan kayo eh. Pukpukin naman po ninyo yung mga members ng technical working group, said Acosta.

Acosta said the slow review of the TWG is the primary cause of delay in the construction of the Atimonan 1 Power Plant.

The ERC is unable to grant its approval because the Board is still waiting for the work of its TWG, said Acosta.

Acosta advised the ERC to strictly follow the timeline it provided and come up with a resolution no longer than five to six months.

The committees ordered the participation of the ERC Chairman and chief executive officer (CEO) in their next hearing, warning that they will subpoena the officer in case of non-compliance.

In addition, the committee requested for supporting documents to be submitted during the next hearing such as the Minutes and copies of the Meralco power supply agreements (PSAs).

Rep. Carlos Zarate (Party-list, Bayan Muna) said the key objective of the inquiry is primarily to look after the welfare of the consumers and to determine whether Meralco's PSAs were in violation of the company's franchise provisions and whether the ERC's decision to extend the enforcement of the mandated competitive selection process (CSP) was meant to accommodate Meralco.

Zarate recommended the careful examination of the Meralco and ERC deals to ensure these will genuinely benefit consumers amid allegations of 'anomalies' in the agreements.

He cited as an example the construction of the Atimonan 1 Power Plant in Quezon province which costs about P112-billion annually for Meralco consumers, or about P2.2-trillion over the 20 year and 6 months contract.

Zarate also said the agreements between Meralco and the seven power suppliers did not undergo proper bidding.

Initially, the ERC Board announced that the deadline for submission of all the documents required in the application for CSP for distribution utilities (DUs) entering into PSA was November 2015.

According to the ERC, the deadline was then extended to April 2016 to accommodate certain inquiries.

But the committee said the decision raised suspicions as the actions taken by ERC were seemingly done to accommodate Meralco.

Rep. Eugene De Vera (Party-list, ABS) said Meralco entering into a 20 year contract is highly questionable because its franchise is only valid for the next 11 years.

Former Bayan Muna Congressman Teodoro CasiAo, convenor of People Opposed to unWarranted Electricity Rates (POWER), urged the House to investigate the ERC for possible anomalies such as allowing Meralco � affiliated generation companies to enter into PSAs that may well result in possible overpricing.

CasiAo alleged that the ERC itself undermined its own rules to favor Meralco, and insisted that the six months extension to sign the documents were provided for Meralco to 'escape' approximately 89 percent of the application process.

He likewise labeled the alleged 'midnight deals' between Meralco and ERC as 'sweetheart deals' as they were most likely a 'contract among themselves' considering that 79 percent of all PSAs involve Meralco-owned generation companies.

Pimentel asked the ERC Board if its deal or transaction is advantageous or disadvantageous to the consumers. The ERC Board, however, failed to provide a direct answer. Pimentel also asked if the Board was pressured to extend the deadline, to which its officers answered in the negative.

House Minority Leader Danilo Suarez (3rd District, Quezon) urged the ERC to protect the credibility of its institution and prove in Congress that the deal will not favor Meralco but the consumers.

Source: House of Representatives

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