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(First of three parts)

The case of Bayan Muna vs. Energy Regulatory Commission and Meralco, for which the Supreme Court has issued a temporary restraining order preventing Meralco from imposing the highest power rate hike in Philippine history, alleges three things:

1. That the ERC abused its power by approving a P4.14/KwH rate hike which Meralco requested via a mere letter and which ERC approved within one working day last Dec. 9, allegeldly to preempt a congressional investigation scheduled on Dec. 10;

2. That the ERC failed in its mandate as provided for in the law to "protect the public from anti-competitive practices and abuse of market behavior of industry players" considering the monopolistic structure of the industry and the dubious circumstances surrounding this particular increase – eight plants making unscheduled shutdowns at the exact time when the Malampaya gas facility and several other power plants were undergoing scheduled maintennance;

3. That Sections 6 and 29 of the Electricity Power Industry Reform Act (EPIRA), which reclassified power generation and supply from public utilities to ordinary businesses and thus not covered by government regulation, is unconstitutional.

The case covers three important problems besetting the Philippine power industry today. One is the ERC's incompetence and beholdeness to the industry players, two is the collusion and market manipulation by industry players that is happening right under our and the ERC's noses, and three the flawed policy of deregulation and, by extension, privatization which allows the first two to happen with impunity.

These problems are especially stark given the events and circumstances surrounding the latest attempt to further squeeze electricity consumers for more profits.

Imagine, why would the ERC, in blatant violation of the law and its own rules, allow Meralco to increase its rates via a mere letter? There were no proceedings, no documents or attachments formally presented and deliberated upon to prove that Meralco was entitled to an increase.

The EPIRA's implementing rules clearly spell out the procedure for rate adjustments: the petition or application for rate adjustment should be legally verified, formally acknowledged by the local government affected, published in a newspaper of general circulation, then subject to a hearing. NONE OF THIS WAS DONE.

In fact, Meralco gave its letter (not even a verified petition) on a Thursday, Dec. 5 and the ERC approved it the following Monday, Dec. 9. That's a mere ONE WORKING DAY to give their approval to the highest power rate hike in history!

Why the rush? Well, it just so happened that the following day, December 10, Congress would be holding a congressional inquiry on the matter where the ERC was expected to be grilled and pressured to protect the consuming public from Meralco's planned increase. What eventually happened is that Congress prevailed on the ERC to spread out the rate hike in tranches.

Was this a "grave abuse of authority amounting to lack or excess of jurisdiction" on the ERC's part? That is now up for the High Court to decide.#

3 thoughts on “The case versus ERC and Meralco (part 1)

  1. Pingback: Power crisis is a problem of policy (part 1) | Teddy Casiño

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