Tuesday, December 17, 2013

Lawmakers, activists want collusion in power firms investigated by DOJ

Citing possible cartelization or combination by several power firms which led to Meralco’s sharp increase in generation charge this month, a group of lawmakers and social activists filed before the Department of Justice (DoJ) this morning, a petition asking the Office for Competition to conduct an inquiry into the matter.

Executive Order No. 45 series of 2011 has designated the Department of Justice as the Competition Authority in the country. Created under this EO was the Office for Competition which can receive any form of complaint as a basis for inquiry or further study on possible violations of laws prohibiting cartelization, monopolies, or combinations in restraint of trade as defined in competition laws.

The petitioners availed of this remedy after the Energy Regulatory Commission (ERC), with neither public hearings nor conduct of probe into allegations of market abuse, approved en toto the amount of P4.15/kWh that Meralco can recover from its purchase of power this month due to the scheduled shutdown of Malampaya natural gas platform.

Signatories to the letter/petition include Akbayan Representatives Walden Bello and Barry Gutierrez, Representative Raymond Mendoza of Trade Union Congress of the Philippines, economist Maitet Diokno of the Center for Power Issues and Initiatives, Wilson Fortaleza of Partido ng Manggagawa (PM) and NAGKAISA, and Freedom from Debt Coalition (FDC) President Ricardo Reyes.

These groups and individuals were involved in campaigns on the power issue prior to and after the passage of the Electric Power Reform Act or EPIRA. They maintain that the unabated increase in power rates, market concentration and the threat of another power crisis were the results of EPIRA which for the past eleven years produced nothing but escalating rates and diminishing power supply.

In particular, the petitioners pointed to possible collusions by Meralco, First Gas Power Corporation, San Miguel Corporation, Kepco Philippines, Aboitiz Power, Team Energy Corporation, AES Philippines and DMCI Holdings, Incorporated when their plants went into simultaneous and unscheduled shutdown resulting to more load deficits in the Luzon grid and which forced Meralco to buy a more expensive power from the Wholesale Electricity Spot Market or WESM.

“The expected and scheduled maintenance of Malampaya notwithstanding—an event Meralco was aware of more than six months before its occurrence—and Meralco’s claim that such was not anticipated, and the unscheduled shutdown of several power plants that resulted to Meralco’s recourse to expensive electricity from the WESM, are information that point to a contrived scenario of extreme short-term shortage of electricity for the purpose of raising the price of electricity beyond what it would cost to generate it,” said the petitioners.

The petitioners bewailed that the increase in electricity costs can only add to the economic burden of end-users and consumers who, at a time when the whole nation is reeling from the brunt of Typhoon Yolanda and in anxious anticipation of the holiday season, face increases in prices of basic commodities like liquefied petroleum gas, Metro Rail Transit fares and the like.

The group vowed to escalate their campaign for the overhaul of EPIRA next year.

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