Meralco to exhaust all legal means to resolve tiff with ERC

by Lenie LecturaOctober 25, 2016

from Business Mirror

A TOP official of the Manila Electric Co. (Meralco) said the utility firm is open to having a dialogue with the Energy Regulatory Commission (ERC), but vowed to exhaust all available legal options, including filing a motion for reconsideration (MR) with the Supreme Court (SC).

“We are always open to any form of dialogue with the ERC…. The Epira [Electric Power Industry Reform Act] clearly allows Meralco to engage in a RES [retail electricity supplier] type of business. So, it’s difficult for us to waive our rights with respect to what the legal framework allows us to do,” Meralco President Manuel V. Pangilinan said.

The SC recently issued a temporary restraining order (TRO) stopping the Regional Trial Court (RTC) in Pasig City from enforcing an injunction order it issued against the implementation of the retail competition and open access (RCOA) system.

The TRO effectively halted legal proceedings in Special Civil Action 149-PSG and from enforcing all orders, resolutions and decisions rendered in Special Civil Action 4149-PSG, entitled Manila Electric Co. v. the Department of Energy and Energy Regulatory Commission. There are three ERC resolutions and one Department of Energy (DOE) circular cited in the case.

Meralco Legal Head William Pamintuan said the utility firm “can file an MR.” Meralco is due to submit on October 29 its comments on the SC order. Another option Meralco cited is“exploring the possibility of forming our own affiliate RES” as allowed by the rules issued by the ERC.

“That is one route we are taking, as well,” Meralco First Vice President Ivanna de la Peña said.

“The RTC has already given preliminary injunction,” said de la Peña, who was referring to a decision of Judge Gregorio Vega Jr. of  RTC Branch in Pasig City. He granted on June 13, Meralco’s prayer for the issuance of a TRO or a writ of preliminary injunction against the DOE from implementing and enforcing its DOE Circular DC2015-06-0010, and the ERC from implementing its ERC Resolution  5, issued on March 8, as well as Resolutions 10 and 11, issued on May 12.

“With respect to the case, we also reported we have there significant number of intervenors, both at the RTC and the Supreme Court on the ERC petition. So, these are consumers like the Citizen Watch, and business groups, like Semiconductor and Electronics Industries in the Philippines Foundation Inc., Philippine Chamber of Commerce and Industry, Employers Confederation of the Philippines and the employees federation of the Philippines. I believe these groups have the interest of the consumers, as well as the members that’s why they have intervened in support of the Meralco position. We trust that all these voices can be heard by the Supreme Court, as well,” de la Pena added.

ERC Resolution 5 spells out the rules governing the issuance of licenses to RES.

ERC Resolution 10, meanwhile, adopts the revised rules on contestable customer  (CC) or those that can choose its own electricity supplier. These are those that register an average monthly peak consumption of at least 1 megawatt (MW) for the past 12 months. ERC Resolution 11 imposes restrictions on the operations of distribution utilities (DUs) and RES in the retail electricity market. In particular, Meralco is prohibited from engaging in the supply of electricity in the contestable market.

These resolutions effectively prohibit DUs’ local retail electricity suppliers (Local RES) from participating in the RCOA as suppliers of electricity. While they allow DU-affiliate RESs to participate in the RCOA, ERC Resolution 11 unduly imposed a 30-percent market cap, whereby all RESs shall not be allowed to supply more than 30 percent of the total average monthly peak demand in the retail market.

In addition, the same resolution also prohibits RESs from supplying more than 50 percent of the capacity requirements of their affiliate CC.

ERC Resolution 10 and the DOE circular provide for mandatory contestability and exclude Local RESs in their scope.