SC asked anew: Extend TRO on Meralco rate hike

MANILA, Philippines – Leftist lawmakers appealed before the Supreme Court (SC) for another extension of the temporary restraining order (TRO) on the December 2013 rate hike of the Manila Electric Company (Meralco).

In an 8-page urgent motion for extension of TRO filed on Tuesday, April 15, legislators belonging to the Makabayan coalition in Congress said, “The TROs, if not extended by this Honorable Court, will leave… millions of Meralco’s captive market, unprotected” and will cause them “grave and irreparable injury.”

The petitioners argued that there is “prima facie findings of collusion, anti-competitive behavior and abuse of market power prevailing in the market during the period questioned and despite the pendency of these consolidated cases.”

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Bayan Muna representatives Neri Colmenares and Carlos Zarate, Gabriela Representatives Luz Ilagan and Emmi de Jesus, Alliance of Concerned Teachers Representative Antonio Tinio, and Kabataan Representative Terry Ridon are among the petitioners.

The SC on February 18 already extended its initial TRO on the record-high rate increase – an extension that will expire on April 22.

In the same resolution, the High Court likewise temporarily restrained generation companies and the electricity spot market operator from demanding and collecting December generation charges from Meralco.

Generation charges represent the cost of producing the electricity, which generation companies collect from power distribution firm Meralco. Meralco, in turn, passes on this costs to consumers. (READ: What Meralco’s rate hike tells us about the power sector)

Meralco’s 4.15/kWh December rate increase is the highest ever to be imposed by the power company. Of the amount, P3.44 represented generation costs.

The increase resulted from the shutdown of the Malampaya gas field and outages of power plants where Meralco sources its power requirements from.

The simultaneous outages forced Meralco to buy power from the Wholesale Electricity Spot Market (WESM), whose electricity prices fluctuate on an hourly basis,depending on bids offered by suppliers.

Oral arguments heard

The High Tribunal is set to decide on whether the rate increase and its approval by the Energy Regulatory Commission is constitutional, after it heard oral arguments on the issue.

Petitioners allege that Meralco unnecessarily inflated the charges passed on to consumers. (READ: Meralco inflated charges, SC told)

During the first day of oral arguments, Colmenares said that Meralco’s contracted power supplier Therma Mobile sold power at the WESM at P62/kWh – the price ceiling at that time – which caused prices to inflate.

Meralco, however, said that it was simply complying with the WESM’s must-offer rule that required its contracted power supplier Therma Mobile to offer power at WESM.

Meralco also argued that petitioners were raising regulatory issues that the ERC and not the High Court should address. (READ: Meralco asks SC to lift TRO on rate hike)

It added that the continued TRO puts Meralco at risk, even warning against rotational black-outs. (READ: ‘TRO on price hike puts Meralco at risk’)

The power distribution company said it was simply a victim of arbitrary bids that messed up pricing at WESM. (READ: Meralco decries arbitrary WESM bids) – Rappler.com