Consumer Rights Lawyer and power industry advocate, Atty. Andres P. Manuel, Jr. points out that the TRO against MERALCO is anti-consumer and anti-competitive.
Last Friday, August 2, 2024, a summary hearing was held before the sala of Judge Antonio M. Olilvete of the RTC Branch 267 for the extension of the temporary restraining order against MERALCO in conducting the competitive selection process for the supply of 600 MW and 400 MW to electricity consumers. Prime Energy Resources, et. al. (Prime Consortium) filed a Complaint for Injunction with Prayer for Issuance of a Temporary Restraining Order. Prior to this, Prime Consortium was granted a 72-hour TRO issued on July 31, 2024 by the Office of the Executive Judge of the Regional Trial Court of Taguig City, thus preventing MERALCO from further conducting the CSP for the supply of 600 MW and 400 MW.
Among the parties who expressed their intent to intervene in the case was Atty. Andres P. Manuel, Jr., a consumer advocate.
In a statement, he said: “From my participation in the proceedings before the Regional Trial Court last Friday, August 2, 2024, it was made clear by the plaintiffs’ own witness that their fuel prices in the form of indigenous natural gas (ING) is higher than imported liquefied natural gas, and that logically, higher fuel costs would result to higher electricity prices to be offered by their client-generating companies.” He added that “this claim for preference in favor of ING was not intended to tie the hands of MERALCO in carrying out its mandate to source supply for its captive market in the least cost manner, otherwise, the entire process of conducting bidding among the power suppliers to avoid monopoly in trade as originally envisioned by the framers of the law, will be set to naught.
It would be recalled that last January 23, 2024, MERALCO conducted a bidding process for 1,200 MW where bidders for both coal-fired and natural gas fired plants submitted their offers. Among the bidders was First NatGas Power Corp. – a client of Prime Consortium. The price offer of First NatGas for the said bidding was considerably higher than the lowest bid for that CSP by about PhP1.37 per kWh. This confirms the statement of Prime Consortium’s witness that their supply would indeed result to higher rates to be shouldered ultimately by consumers.
There is no doubt that this claim of preference by Prime Consortium will lead to a more expensive and higher cost of electricity for consumers within the MERALCO franchise area. It was also made clear that what Prime Consortium is seeking is the revision of the MERALCO Terms of Reference for both the 600 MW and 400 MW CSP such that the bidding would favor generating companies sourcing ING over all others even if their prices are higher – which is obviously both anti-consumer and anti-competitive.
It should be noted that all distribution utilities are required by law (Section 23, R.A. No. 9136) to supply electricity to their consumers in the least cost manner. What Prime Consortium is doing in this case is effectively strong-arming MERALCO into violating its least-cost mandate under the EPIRA.
Finally, Manuel said, “it appears that Prime Consortium is suing the wrong entity. MERALCO is not soliciting offers from fuel suppliers in its conduct of the 600 MW and 400 MW CSP.” In expressing his observations, Atty. Manuel clarified that “he has no intention of swaying the Court’s own appreciation of the outcome of the case and the public in general.” Nonetheless, the facts remain obvious that MERALCO is soliciting offers from power producers. If Prime Consortium’s client or clients would not use its more expensive fuel (ING) – this brings us to the question if Prime Consortium would fault MERALCO for this, again raising this claim of preference.