Energy body asked to dismiss, not defer, power supply deals without ECC

A consumer group has asked the Energy Regulatory Commission (ERC) to dismiss three power supply agreements filed by the Manila Electric Company (Meralco) in April 2016 allegedly because these deals don’t have Environmental Compliance Certificates (ECC).

Romeo L. Junia of Power for People coalition said the deals should have been been dismissed outright when they were filed due to lack of ECC, which is contrary to ERC rules. Instead, the ERC, in an order dated March 20, 2018, gave Meralco an extra 60 days to submit the ECC.

In a statement issued on Friday, Junia stressed that the March 2018 order was already more than two years late and overdue. He pointed out that the acceptance and processing of the incomplete applications for the power deals when they were filed in April 2016 was void from the start.

The PSAs cover contracts with Central Luzon Premiere Power. Corp., Mariveles Power Generation Corp. and Global Luzon Energy Development Corp. involving some 1,600 MW in all.

Junia has filed a motion to dismiss the defective applications. He is a consumer intervenor opposing approval of seven Meralco PSAs filed after deadline and above market price. The three  PSAs in question are part of this lot.

It took a letter from the Department of Environment and Natural Resources to ERC asking that proceedings on the three PSAs be held in abeyance to suspend the processing of the alleged defective filings, Junia noted.

He also pointed out that the applications were filed after 5 p.m. of April 29, 2016, contrary to ERC’s notice that “Power Supply Agreements…  not yet covered by the CSP (Competitive Selection Process) Resolution must be filed with the ERC before the close of business hours (i.e. 5 p.m.) on 29 April 2016.” The ERC witness at the House hearings on the PSAs testified that these applications were filed after 5 p.m.

Addressing Meralco’s threat of higher rates with the power deals delayed, Junia pointed out that the reason for the delay is Meralco’s refusal to subject their power deals and their supply requirements to CSP or public bidding. The average price of the Meralco contracts was P3.67 pkwh at the time of filing in 2016, compared to coal power supply proposals of P3.00 pkwh. Solar was even slightly lower, Junia said.

“All Meralco has to do now is submit the 3,551 MW covered by its PSAs with sister and affiliate companies to public bidding, and the market will show us the least cost supply,” he added.