Meralco nudges ERC on 7 PSA applications

By Lenie Lectura – October 4, 2017

from Business Mirror

A top official of the Manila Electric Co. (Meralco) said the utility firm “remains hopeful” that regulators will immediately act and approve soon its seven power-supply agreement (PSA) applications.

“We still remain hopeful. We still expect them to deliver…what they promised,” Meralco President Oscar Reyes said.

Reyes was referring to the commitment made by the Energy Regulatory Commission (ERC) to Congress in July that it would try to render a decision on the pending PSA applications in three months. That schedule ended early this week.

Three months later the ERC has yet to act on the PSA applications of Meralco.

The ERC, for its part, assured electricity consumers that the Meralco PSA applications are being evaluated to ensure that only just and reasonable costs shall be included in the electric bill.

“We are carefully scrutinizing each of the cost components in the Meralco PSA applications,” ERC Officer in Charge Alfredo J. Non said. “That is why the final approval of these applications have been taking some time.”

Under Section 45 of the Electric Power Industry Reform Act of 2001, the ERC is mandated to review bilateral power-supply contracts entered into by distribution utilities.

The ERC’s PSA approval entails a comprehensive process, which includes the conduct of the hearing, filing of formal offer of evidence, technical evaluation, commission deliberation and issuance of a decision.

The ERC further explained that the grant of provisional or even a final approval to just one Meralco PSA application should not be equated to all PSAs approval as applied by the applicants.

The rates and conditions that were provisionally approved are not necessarily the same rates and conditions in the final approval or decision of the case, said the agency.

More often than not, the final rates have been lower. The agency also clarified that the Provisional Authority granted to Panay Energy Development Corp. in July last year was necessitated in view of the frequent yellow-alert status of power reserves at that time.

“We must remember that stable supply of power is among the anchors of our economy,” Non said. “We granted the provisional approval because it will be more beneficial to the consuming public, and the country as a whole, to have a continuing stable power supply than have rotating brownouts, which is more damaging to the economy.”

The agency earlier denied the petitions of some individuals who want to intervene in the ongoing hearings mainly due to technicality.

According to the advocacy group Freedom from Debt Coalition (FDC), the ERC dismissed the joint Petition for Intervention filed by several allied groups due to technical grounds: being filed out of time.

On October 2, members of the advocacy group Power for People Coalition filed their motion for reconsideration in their recently denied petitions, the FDC said in a statement.