Meralco probe to focus on anti-trust violations

MANILA, Philippines - The Department of Justice (DOJ) will focus its investigation into the steep rate adjustment being sought by the Manila Electric Co. (Meralco) on the power distributor’s possible violation of anti-trust laws, particularly restraint of trade and unfair business practices.

Justice Secretary Leila de Lima also said yesterday that the DOJ’s office for competition, tasked to conduct the probe, would summon government officials and private executives to explain allegations that some power firms had colluded with one another to manipulate power costs.

“The policy under our Constitution is that there should be competition – not collusion. Collusion is the very anti-thesis of competition and we have laws against collusion,” she stressed.

The Supreme Court (SC) earlier issued a temporary restraining order on Meralco’s P4.15 per kilowatt-hour rate increase. Meralco said the adjustment was necessary, as generation cost had surged due to the scheduled shutdown of the Malampaya natural gas plant and the “forced shutdown” of several other key power facilities.

De Lima said DOJ investigators would try to determine if laws had been violated with the simultaneous shutdown of the plants.

Article 186 of the Revised Penal Code penalizes violators of the law against monopolization and restraint of trade, with imprisonment and fines of between P200,000 and P600,000, the DOJ chief said.

Another relevant law, she said, is Republic Act 3247 (Act to Prohibit Monopolies and Combinations in Restraint of Trade).

“We want a holistic approach. This is a very significant matter. This is a hot issue, a matter of national interest,” she said.

The power firms to be covered by the probe, based on a complaint filed by militant lawmakers, are First Gas Power Corp., San Miguel Corp. Global Power Holdings (holding company of Kepco Philippines), Aboitiz Power Corp., Team Energy Corp., AES Philippines and DMCI Holdings Inc.

“Aside from relevant agencies like DOE (Department of Energy) and ERC (Energy Regulatory Commission), we will be inviting professional people or those in the know to serve as resource speaker. We have to look into possible market abuses,” De Lima added.

Refund

Party-list group Bayan Muna, meanwhile, is urging Meralco to refund any excess payment received from its five million customers this month, citing the recent Supreme Court TRO.

“Meralco should immediately refund consumers who already paid their electric bills, including the P2.41 per kwh generation charge increase,” Rep. Neri Colmenares said.

“It should also not implement any notice of disconnection this December because many of its customers are still confused as to the actual amount they should pay,” he said.

He said those who have not paid for their electricity use may deduct the P2.41 per kwh increase in generation charge, which is the first item in a long list of charges reflected in their bills.

The total amount of generation cost adjustment covered by the TRO is P4.15: P2.41 this month, P1.21 in February and 53 centavos in March.

The increase was supposed to be added to the usual generation charge of about P5.70 per kwh.

Many of Meralco’s customers are believed to have already paid this month’s increase. In most parts of Quezon City, for instance, the due date for settling Meralco bills was last Dec. 20, three days before the SC issued the TRO.

A household that used up 200 kwh would have paid an extra P482. One that consumed 500 kwh would have paid an additional P1,250.

This situation would not have happened had the ERC subjected Meralco’s rate hike petition to public hearings, Colmenares said.

ERC should have asked the distributor to justify every centavo of the increase and should have given consumers the opportunity to do their own scrutiny and oppose the adjustment, he said.

Bayan Muna raised the issue of due process in asking the SC to stop the increase.

The TRO means that ERC’s “approval of the increase was hasty and in violation of due process,” Colmenares said.

He also revealed that power producers, distributors and electric cooperatives in the provinces like Pangasinan, Baguio City and Camarines Sur are increasing their rates by P3.89 to P5.16 per kwh.  – Jess Diaz