Group urges ERC to cite Meralco for alleged ‘abuse of market power’

The National Association of Electricity Consumers for Reforms Inc. (Nasecore) is asking the Energy Regulatory Commission (ERC) to penalize the Manila Electric Co. (Meralco) for alleged abuse of market power.

In its motion filed with the ERC, Nasecore also pointed out that Meralco allegedly threatened the ERC into granting them provisional authority (PA) for their five power supply agreement (PSA) applications pending before the commission.

Nasecore alleged that Meralco’s application for PA for the issuance of the PSAs is tantamount to a threat to the government regulator as it provided the ERC with a deadline of December 26, 2019, to approve the contracts. Otherwise, it added, Meralco may be “exposing” its consumers to “volatile” electricity prices.

“The subject application seeks this PA which means that there is an emergency situation not within the control of Meralco. However, it should be stressed that this emergency situation is not based on a ‘force majeur’ situation,” Nasecore added.

In short, there was no force majeur beyond Meralco’s control that prevented it from sourcing, procuring and entering into bilateral contracts in accordance with the law and rules governing the same, on the Power Demand and Supply Outlook and Distribution Development Plan it submitted to the DOE as early as 2016, the group added.

“Obviously, Meralco failed to do this, thus creating this emergency condition which is of its own making,” it said, adding that “this application holds hostage the regulators into approving the contracts. It’s a veiled threat not only to ERC but also to its consumers.”

Meralco is seeking the approval of ERC for five power supply contracts with San Miguel Energy Corp., First Gen Hydro Power Corp., South Premiere Power Corp. and Phinma Energy Corp. for 1905 megawatts as some of its current supply contracts are set to expire on December 25, 2019.

“Meralco’s application for PA is not based on force majeure condition. Therefore, inappropriate, misplaced and a violation of the law as this constitutes abuse of market power, such as not limited to unfair trade practices, monopolistic schemes and any other activities that will hinder competitiveness or business and industries,” said Nasecore.

When sought for comment, Meralco Assistant Vice President Joe Zaldarriaga said these PSAs underwent CSP’s (competitive selection process) that were observed by the Department of Energy.

“We presented and continue to present our evidence and testimony in public hearings at the ERC, during which other consumer groups expressed their support for the approval of the PSAs except, perhaps, for a few. We believe the PSAs will benefit our customers through cost competitive  and reliable supply. To also say that we issued a threat or any form thereof is baseless, unfair and devoid of factual and legal basis,” he said.

“I really hope that we just stick to the issues which is to obtain the least cost through reliable and adequate supply as evidenced by our submission to the regulator,” Zaldarriaga said.

Image Credits: Roy Domingo



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