ERC ‘too small’ to track Meralco collusion

MANILA, Philippines – The Energy Regulatory Commission (ERC), which approved the record-high power rate hike of the Manila Electric Company, turns out to have a staff too small to monitor possible collusion between Meralco and its power suppliers.

It has only 4 people to monitor the electricity spot market, said ERC chairman Zenaida Ducut during a hearing conducted by the committee on energy at the House of Representative on Wednesday, January 22.

Ducut told the committee the ERC has started probing allegations of collusion between suppliers and distributor, but has not arrived at a conclusion precisely because the commission is undermanned.

“ERC is undermanned. We have only more than 400 people in our plantilla, but insofar as our spot market division is concerned, we only have 4 personnel under our plantilla,” Ducut, an ex-Pampanga congresswoman, told her former colleagues in the House.

Critics found unacceptable this “excuse” for ERC’s “failure” to protect consumers.

ERC approved Meralco’s record-high rate increase of P4.15 per kilowatt hour, spread over 3 months. The Supreme Court, however, quickly issued a temporary restraining order on the new rates upon a complaint filed by a progressive bloc in the House.

The committee resumed its hearing on allegations of collusion a day after the Supreme Court heard oral arguments on the same allegations. (READ: Meralco inflated charges, SC told)

Bayan Muna Representative Neri Colmenares, one of the petitioners in the SC case, accused Meralco of jacking up prices at the Wholesale Electricity Spot Market (WESM) through power generation company Therma Mobile Inc. Meralco and Therma Mobile have a power supply agreement.

When Meralco’s primary power source, the Malampaya gas field, was shut down for maintenance, all power producers were required to sell in the spot market. Meralco turned to WESM.

But Meralco itself helped jack up prices at WESM. Therma Mobile sold power at a very high rate of P62/kWh, the ceiling price at WESM, supposedly upon the instructions of Meralco. This increased the WESM price, which is usually at an average of P8/kWh.

Colmenares said ERC cannot be excused because they are undermanned.

“They only have 4 personnel because they do not have any intention to monitor,” Colmenares said. “Have they monitored any market abuse? None. It is not an excuse. It is their problem,” he added. Watch his reaction below:

Oriental Mindoro Representative Rey Umali, the chairman of the energy committee, said they are hoping for a solution “without having to wait for SC decision.”

“There is no power crisis, this is a power rate crisis,” said Umali. – Rappler.com