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SC extension of TRO vs power rate draws mixed reaction

The Supreme Court on Tuesday decided to indefinitely extend the temporary restraining order (TRO) against the imposition of the P4.15 per kilowatt hour increase in electricity charges of Manila Electric Company (Meralco) is indefinitely extended. Video by INQUIRER.net’s Bong Lozada/edited by Ryan Leagogo

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MANILA, Philippines – Mixed reactions greeted the Supreme Court order indefinitely holding a power rate increase that triggered public protests late last year.

The Manila Electric Co. (Meralco), which is prohibited from collecting any increase in power generation rates imposed in December 2013, and government regulators who had earlier approved the rate increase said they will observe the status quo.

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However, petitioners against the power hike said this was only one step in resolving the issue. All parties expressed hope that the Supreme Court would issue a definitive ruling on whether the rate hike should be allowed or not.

Voting 10-4, the high court issued a temporary restraining order Tuesday morning “effective immediately and until further orders.”

The TRO, which in effect indefinitely extended a TRO which it first issued in December, directs Meralco to hold off collecting the proposed P3.44 per kWh hike in power generation charges last December, which would have resulted in an all-in power rate increase of P4.15 per kWh. The TRO also enjoins the Energy Regulatory Commission (ERC) against implementing its order last December allowing Meralco to stagger the collection of the proposed increase.

As for power producers and the operator of the Wholesale Electricity Spot Market (WESM), where unusual price surges pushed power rates up, the latest TRO said, “ENJOINING the generating companies, specifically Masinloc Power Partners Co., Ltd., c/o AES Philippines, San Miguel Energy Corporation, South Premiere Power Corp., First Gas Power Corporation, and the National Grid Corporation of the Philippines from demanding and collecting the deferred amounts representing the affected costs based on the matters raised in Meralco’s December 5, 2013 letter; and (c) ENJOINING the Philippine Electricity Market Corporation from demanding and collecting the deferred amounts representing the affected costs based on the matters raised in Meralco’s December 5, 2013 letter.”

PEMC operates the WESM.

Meralco officials said the country’s largest distribution utility “respects” the order. The head of the company’s legal affairs office, William Pamintuan, said via text message that Meralco will “fully comply” with the TRO.

Utility Economics head Lawrence Fernandez said separately, “Although we still need to get a copy of the Order and study it, we should note that the matter involves generation costs while distribution utilities like Meralco are mandated to pass through and reflect in consumers’ billings in accordance with relevant rules.”

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ERC executive director Francis Saturnino Juan said, “We will still secure a copy of the Supreme Court’s Resolution to know if there is anything ERC will have to do pursuant to it and if none, the ERC will just await further orders from the Court. In the meantime, the status quo will be observed.”

Last March, ERC had ordered the recomputation of “unjustifiable” WESM rates that factored into the controversial rate hike in December 2013.

The rate increase for the month in question is thus expected to be much lower than the P3.44 per kWh that was addressed by the TRO. The new rate is widely expected to be around P0.27 per kWh, although Meralco has not confirmed such figure. With the TRO extended, however, the new WESM rate will not be implemented yet.

Energy Secretary Carlos Jericho Petilla, who has been calling for an early resolution to the power rate issue, said in a text message, “We respect the decision of the SC but we are also hoping that a decision will eventually be issued so we can concentrate in moving forward.”

The Makabayan bloc in Congress, which filed the motion last week to indefinitely extend the TRO, welcomed the Supreme Court decision. Bayan Muna Rep. Neri Colmenares said this protects electricity consumers from bearing the “unjust” rate hike.

However, Colmenares said, “We just hope that the SC will eventually declare the P4.15 rate hike void as well as the subsequent proposed increases connected to the market manipulation and collusion of power industry players. We also hope that the Supreme Court would finally declare the Electric Power Industry Reform Act (EPIRA) unconstitutional so that this type of unjust rate hikes would not happen again.”

ACT Teachers party list Rep. Antonio Tinio said, “At the same time, we urge the Court to swiftly resolve the issues we’ve brought before it. We hope it will side with the people in declaring grave abuse of discretion on the part of ERC in failing to prevent the unprecedented price hike and, more importantly, declare the privatization of power generation as unconstitutional.”

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