ERC says there was no partiality to Meralco following power ‘midnight deals’

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The Energy Regulatory Commission (ERC) denied accusations from lawmakers of alleged ‘midnight deals’ to accommodate Manila Electric Company’s (Meralco) power supply agreement (PSA) contracts for seven coal-fired power plants.

Speaking before the House Committee on Good Government Tuesday, ERC Commissioner Josefina Patricia M. Asirit said she can personally attest that no power company was afforded preferential treatment by the commission.

“There was no intention to exercise partiality to any particular generator or distribution utility,“ Commissioner Asirit said.

The House of Representatives is investigating alleged irregularities in the implementation of the government’s competitive selection process (CSP). Bayan Muna Rep. Carlos Zarate, who filed House Resolution No. 566, said delays in the enforcement of CSP seemed to have benefited Meralco and its affiliates.

In calling for a House probe, Zarate said the ERC was supposed to implement the CSP as early as November 6, 2015, as mandated by a Department of Energy (DOE) circular imposing a competitive bidding for power supply, as opposed to negotiated contracts.

However, Zarate claimed that the ERC opted to postpone the implementation to April 30, 2016. During this period, a total of 3,551 megawatts of negotiated power supply agreements were created.

These  include Meralco PSAs with Panay Energy Development Corp. (70 MW), Redondo Peninsula Energy Inc. (225 MW), St. Raphael Power Generation Corp. (400 MW), Central Luzon Premiere Power Corp. (528 MW), Mariveles Power Generation Corp. (528 MW), Global Luzon Energy Development Corp. (600 MW), and the Atimonan One Energy Inc. (1,200 MW).

Asirit asserted the ERC did not even know that Meralco had filed cases before the implementation of CSP.

“We did not even know that Meralco filed all those cases,” Asirit said, emphasizing that the extension was a collective decision set by the regulating body because they found it more difficult to have to deal with each single applicant asking for an exemption from the CSP.

In addition, the ERC was not able to anticipate the number of PSAs in the negotiation stage in the said period.

“Considering the length of time that we had discussions on the effectivity, whether or not we would actually extend the deadline of the effectivity of the implementation of the CSP, the April 30 deadline came to pass,” she said.

Meralco, for its part, said PSAs in question were above board and all these underwent thorough discussion and selection process.

“Meralco’s 7 long-term power supply agreements filed before the ERC on April 2016 are not midnight deals. Discussions with power project proponents started as far back as 2012,” Meralco first vice president Ivanna De La Peña said, stressing that the procurement process of the PSAs began at least a year before filing for ERC approval.

The PSAs, Meralco said, ensure the least-cost of power for its captive customers and keep them from price spikes in the Wholesale Electricity Spot Market.

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