ERC bent rules in power deals

Sun.Star Davao - - OPINION -

THE En­ergy Reg­u­la­tory Com­mis­sion (ERC) twisted its own rules and al­lowed Manila Elec­tric Com­pany (Mer­alco) to file past the des­ig­nated dead­line time and day seven con­tro­ver­sial power sup­ply agree­ments (PSAs) that Mer­alco awarded out­side the ERC’s com­pet­i­tive se­lec­tion process (CSP) to fa­vored power gen­er­a­tion com­pa­nies (gen­cos).

Rep­re­sen­ta­tive Car­los Isagani Zarate of party list Bayan Muna noted the ERC’s ir­reg­u­lar rules at the re­sump­tion last Oct. 11 of a House in­quiry on ERC is­sues, in­clud­ing the post­pone­ment of the com­pet­i­tive se­lec­tion process (CSP), the ERC’s very own pro­gram to get the least cost of elec­tric­ity through a bid­ding process.

Zarate said that the joint House com­mit­tee in­quiry found out from an ERC em­ployee that all of the seven Mer­alco PSAs failed to beat the dead­line -- set on or be­fore 5 p.m. of April 29, 2016 -- for fil­ing of PSAs that did not un­dergo a CSP.

Sh­eryl Calinog, sec­re­tary of ERC’s gen­eral records di­vi­sion, told law­mak­ers un­der oath that four of the PSAs were ac­tu­ally filed on May 2, 2016 – or three days af­ter dead­line. But lawyer Jojo To­mas, then the ERC’s di­rec­tor for le­gal, in­structed Calinog to put April 29, 2016, as fil­ing date of the four PSAs.

Calinog added that the three other Mer­alco PSAs were filed be­tween 5:30 p.m. and 7:25 p.m. – or past the 5 p.m. close of of­fice hours -- of April 29, 2016.

Zarate said that, based on Calinog’s state­ments, the late fil­ings vi­o­lated ERC’s very own ad­vi­sory, re­leased on April 27, 2016, wherein the ERC re­minded all dis­tri­bu­tion util­i­ties (DUs) and elec­tric co­op­er­a­tives (ECs) to file their PSAs “be­fore the close of the busi­ness hours (i.e. 5 p.m.) on 29 April 2016”, if they wanted their PSAs to avoid a CSP.

The ad­vi­sory stressed that “after­wards, no PSA filed with the ERC will be dock­eted un­less it has un­der­gone CSP.” In other words, “the seven PSAs should be sub­ject to a CSP”, Zarate stressed.

A pro­gram meant to cut down power rates, the CSP re­quires ECs and DUs like Mer­alco to re­ceive at least two qual­i­fied bids for sup­ply of elec­tric­ity from gen­cos, with which the DU is not pro­hib­ited from en­ter­ing into a power sup­ply con­tract.

The seven PSAs, cost­ing Mer­alco cus­tomers tril­lions of pe­sos over 20 to 21 years, call for the sup­ply of 3,551 megawatts of elec­tric­ity. Six of the PSAs went to gen­cos that ei­ther sub­sidiaries or af­fil­i­ates of Mer­alco.

As the House in­quiry re­sumed, ERC Com­mis­sioner Jose­fina Pa­tri­cia Asirit ex­plained that ERC em­ploy­ees “fol­low flexi time”. Her re­ply drew ad­verse re­ac­tions from law­mak­ers at the hear­ing.

- Bayan Muna

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