House tells ERC: Resolve Meralco PSA applications

The House Committees on Energy and on Good Government and Public Accountability are prodding the Energy Regulatory Commission (ERC) to resolve the debacle over the seven Power Supply Agreement (PSA) applications from Manila Electric Company (Meralco)-linked generation companies.

In its committee report, the joint panel recommended that the ERC quickly resolve the PSA application issue, but not before the agency has conducted appropriate hearings and Meralco has complied with all the requirements prescribed by laws, rules and regulations.

The joint panel sought the approval of its report as well as the adoption of the resolution pursuant to House Resolution (HR) No. 1161 filed by House Minority leader and Quezon 3rd district Rep. Danilo Suarez.

The resolution called for a House investigation on the immediate approval of the seven PSAs.

Suarez said the much-needed PSAs would be in line with the administration’s infrastructure development thrust. They are also expected to reduce transmission congestion in Luzon, and in turn prevent intermittent power outages that interrupt business activities and dampen economic growth in the region.

The PSAs would account for 3,551 megawatts (MW) of baseload power supply, which would help secure the power requirements of more than five million electricity consumers in the next three to five years.

Under the Electric Power Industry Reform Act (EPIRA), all distribution utilities (DUs) must supply electricity at the least cost to their consumers.

Conceptually, least-cost power rates can only be achieved if power supply purchases undergo competitive bidding.

In compliance with EPIRA, Meralco said that prior to the submission of the PSA applications, there have been rigorous negotiations with the end goal of securing power supply for its customers at the most reasonable cost possible.

Another congressman, Bayan Muna Party-List Rep. Carlos Zarate, had branded the Meralco PSAs as "sweetheart deals" saying the PSAs were accepted by the ERC even after the prescribed application period had lapsed.

Suarez also called on the ERC to speed up approval of a foreign investor’s application to build a power plant that would help generate muchneeded baseload in the country.

If the energy body continues to delay the approval, the investor might back out, he said.

“We have to quickly resolve this and be considerate with investors; time is [costly] if we continue to delay the approval process,” he said.

He reckoned that it is crucial for the ERC to give the green light to applicants that complied with the regulatory requirements for building new power plants.

The new plants will enable the country to cope with the growing energy demand of 4.9 percent, which is equivalent to a 600-MW additional capacity per year.

Twenty percent of the existing plants are more than 30 years old and may have reliability and dependability issues, Suarez had noted.