Osmeña: Petilla should resign over Meralco rate hike

Rappler.com
Osmeña calculates that using the Malaya plant could have significantly brought down market prices by at least P20

'DYNAMITE MALAYA.' Senators criticize government agencies for failing to use the state-owned Malaya power plant to bring down the prices of electricity and help consumers. Photo by Albert Calvelo/Senate PRIB

MANILA, Philippines – “Kung hindi siya nakakaintindi hanggang ngayon after one-and-a-half years as energy secretary, I suggest that he resigns.”

(If he can’t understand until now after one-and-a-half years as energy secretary, I suggest that he resigns.)

Senator Sergio Osmeña III said this in a radio interview on Saturday, January 25, in reaction to Energy Secretary Jericho Petilla’s claim that the Electric Power Reform Industry Act kept him from preventing Manila Electric Company’s (Meralco) power rate hike. (READ: Meralco: We did not mean to inflate power charges)

‘Yan ang malaking kalokohan. That’s why I’m accusing these guys of lying through their teeth and covering up, because that is the biggest foolishness I’ve ever heard in all of my hearings, na wala silang karapatan. Naku po. This is a bidding process,” he said.

(That’s big foolishness. That’s why I’m accusing these guys of lying through their teeth and covering up, because that is the biggest foolishness I’ve ever heard in all of my hearings, that they don’t have the right. This is a bidding process.)

Osmeña said he can bring 100 witnesses to show how the Wholesale Electricity Spot Market (WESM) actually operates. 

According to him, the state-owned Malaya diesel power plant should have been dispatched by the Private Sector Assets and Liabilities Management Corporation (PSALM) and the Department of Energy to the tight bidding at the WESM last November 2013 to avoid the price hike.

Osmeña calculated that using the Malaya plant could have significantly brought down prices in WESM by at least P20. As a result, the burden passed on to consumers would have been lower. (READ: ‘Burn gov’t plant if not helping consumers’)

But during the hearing on the hike last Wednesday, January 22, at the House Committee on Energy, PSALM said they avoided as much as P1 billion in losses by not running the 620-megawatt government plant. (PSALM avoids losses by keeping plant offline during Malampaya shutdown)

This is in step with their mandate to keep the government’s debts and losses from ballooning, PSALM president Emmanuel Ledesma Jr added.

PSALM put in a bid at the WESM but didn’t synchronize the plant to the power grid because it did not want to be dispatched. This avoided losses that would have otherwise been shouldered by consumers under the universal charge for stranded debt.

Proposals

But Osmeña said on Saturday the plant should have been operated when it was needed.

“Siya [Petilla] mismo nagsasabi the government has to own a plant. All right so now you own a plant. What happened when there was an emergency? You didn’t operate it anyway, you id**t. So tumaas tuloy ang presyo para sa lahat,” he said.

(He himself said the government has to own a plant. All right, so now you own a plant. What happened when there was an emergency? You didn’t operate it anyway, you id**t. That’s why the price hiked for all.)

Osmeña, who chairs the Senate Committee on Energy, said they will propose changes in WESM rules such as bringing the price cap down to P32 from P62. Osmeña is also known to be an ally of the Lopezes who have kept a minority share in Meralco, after giving up control in 2009.

Other proposals include giving more power to and increasing the budget of the Energy Regulatory Commission.

A higher budget will allow the Commission to hire more people to monitor the electricity spot market. According to Osmeña, ERC can be faulted for failing to keep a close watch on the market days before the power shortage last November. (READ: ERC oks Meralco’s staggered rate hike– Rappler.com