The Energy Regulatory Commission (ERC) has released an order to Manila Electric Co. (Meralco) and GNPower Ltd. Co to stop and refrain from “assessing, billing and collecting” from Batangas Paper Corp. (BPC) any distribution charges until their issue is resolved.
“It is evident that an invasion of a right, which is material and substantial, is being continually inflicted upon the business interest of BPC,” the ERC said in its order dated Dec. 5, 2018 and docketed earlier this week.
The order also said that the case “warrants for an urgent and paramount necessity” for the ERC to issue a relief prevent any serious complications against BPC, which makes the halt to Meralco’s distribution wheeling charges “therefore paramount.”
The case started from a complaint filed by BPC against GNPower and Meralco for the refund of P12,171,764.50 with legal interest, showing what is alleged as “unauthorized and illegal” assessment and collection of the distribution utility’s wheeling charges.
Meralco exclusively operates a distribution system in the location where BPC operates and maintains its paper factory in Sto. Tomas, Batangas.
Meanwhile, GNPower is a retail power supplier that exclusively provides all of the paper factory’s needs in means of a “master power purchase sale agreement.”
BPC said it received a total of seven separate billing statements from GNPower totalling to P30,652,694.06 for the wheeling charges since March 26, 2017.
According to initial inquiry, GNPower told BPC that the charges were for the use of Meralco’s supposed ownership of the sub-transmission lines through which the electricity being provided by the RES passes.
However, BPC said it had discovered “much to its surprise and dismay” that Meralco is “in truth and in fact, not the real and/or the bonafide owner” of the lines for which it was collecting the distribution utility wheeling charges.
Before filing the case, BPC tried to stop or preclude Meralco from assessing the “baseless and unwarranted” and convince the distribution utility to return what was collected.
“[B]ut all such effort have come to naught, hence, the filing of the instant complaint,” it said.
There is enough evidence for the issuance of the cease and desist order, the ERC said.
ERC emphasized that GNPower is responsible for all contractual, service, and billing matters related to its contestable customers as a retail electricity supplier.
According to ERC’s record, BPC is directly connected to the 9.72-kilometer segment of the 38.72 kilometer sub-transmission line, currently owned, operated, and managed by the National Grid Corporation of the Philippines.
Almost the entire length of the sub-transmission line is located around the franchise areas of both Meralco and Batangas II Electric Cooperative, Inc., it added.
In addition, records showed that Meralco has pending applications with the commission for the approval of its acquisition of the subject sub-transmission line where BPC is connected.
As of now, there is no decision yet on the application filed by Meralco and GNPower, making them in no position to acquire and operate the sub-transmission line, the ERC said.
The ERC said the allegations showed by Meralco “lost sight of the fact that [it] can only legally impose the [distribution utility wheeling charge]” on BPC as a contestable customer “if and only if it has assumed ownership of the sub-transmission assets.”