SC extends TRO on Meralco rate hike

MANILA, Philippines (UPDATED) – The Supreme Court on Tuesday, February 18 extended for another 60 days the temporary restraining order (TRO) on Manila Electric Company’s (Meralco) record-high rate increase.

Granting a motion filed by militant and consumer groups, the SC extended the TRO until April 22. This means that until then, Meralco is barred from collecting from customers the P4.15 per kilowatt-hour (kWh) rate hike it announced in December.

At the same time, the High Court issued TROs, stopping generation companies (gencos) and the electricity spot market operator from demanding and collecting December charges from Meralco. The TROs will also expire on April 22.

Meralco’s P4.15/kWh hike was the highest in history. Of the amount, P3.44 represented generation charges.

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Generation charges are what gencos collect from Meralco for power they supply the utility firm. Meralco passes these charges on to consumers and remits the payments to gencos upon collection. Meralco buys power from gencos through bilateral supply contracts or the Wholesale Electricity Spot Market (WESM).

Meralco was supposed to implement its rate increase in 3 tranches – P2 per kWh in the December bill, P1 per kWh in February, and P0.44 per kWh in March – but the SC stopped it from doing so. 

Groups led by Bayan Muna and the National Association of Electricity Consumers for Reforms questioned the increase before the Court, alleging players in the energy sector committed market abuse.

William Pamintuan, Meralco’s legal head, said the company has yet to receive the SC order on the TRO extension.

Pamintuan said, “Meralco will abide by the decision of the SC and will continue to discuss with the generation companies, PEMC (Philippine Electricity Market Corporation), DOE (Department of Energy), ERC (Energy Regulatory Commission), consumer groups and other stakeholders regarding this issue. Meralco is still hopeful that this case before the SC will be resolved at the soonest possible time to the satisfaction of all stakeholders.”

Energy Secretary Carlos Jericho Petilla welcomed the TRO extension. Petilla also expressed apprehension, however, saying, “While it is not yet determined how much needs to be collected from the consumers, the TRO is, in a sense, good for the consumers. In the end, the solution here is for the courts to determine how much the price is.”

Petilla added, “the solution here is to decide on the proper amount as quickly as anybody can.”

Meralco blamed the increase on high prices at WESM.

The utility firm had to source more power from WESM after the Malampaya natural gas facility went on maintenance shutdown, and its other power plant supplliers implemented unscheduled outages.

The company maintains it does not earn from generation charges, which are pass-through charges. – with a report from Buena Bernal/Rappler.com