Energy Regulatory Commission (ERC) / STOCK
The Energy Regulatory Commission (ERC) has stopped several power companies and the operator of the Wholesale Electricity Spot Market (WESM) from disrupting the electricity supply of large industrial customers after the latter complained that the rates under their original contracts have been unilaterally tweaked.
The regulator issued a total of 13 cease and desist orders against Manila Electric Co. (Meralco); MPower, Meralco’s local electricity supply arm; SMC Consolidated Power Corp., a wholly owned subsidiary of SMC Global Power Holdings Corp.; Vantage Energy Solutions Management Inc.; and the Independent Electricity Market Operator of the Philippines (Iemop), the WESM operator. The distribution units and Iemop were included in the case since they implement disconnection notices.
Petitioners include Taifini Copper and Conductor Inc., Air Liquide Pipeline Utilities Services Inc.-Balamban, Air Liquide Philippines Inc., Air Liquide Pipeline Utilities Services Inc., Abenson Inc., Willin Sales Inc., Waltermart Ventures Inc., Winsome Development Corp., Willimson Inc. and WJ Global Inc.
“According to the contestable customers, their contracts prescribed fixed rates but the adjustments are now being claimed unilaterally by their suppliers in violation of their supply contracts,” the ERC said.
Under the retail competition and open access rule, contestable customers are consumers with large demand that can tap their choice of retailer to supply their electricity needs.
The complaints stemmed from the differing interpretations of retail suppliers on the recovery of fuel cost increases in the contracts. Fuel prices have been going up in recent months.
With the halt orders in place, the respondents are required to observe the terms and conditions of the original supply agreements.
“Consumers are assured of continuous electricity supply pending the final resolution by the ERC by the issuance of the [cease and desist orders] as part of the latter’s mandate to protect consumer interests,” the regulator said.
Under the Electric Power Industry Reform Act of 2001, the ERC is authorized to issue cease and desist orders after due notice and hearing.