THE Manila Electric Co. (Meralco) has denied that the seven long-term power supply agreements (PSA) it submitted to the Energy Regulatory Commission (ERC) in April last year were “midnight deals.”
The House committees on good government and public accountability and energy held a joint hearing yesterday on the alleged “midnight deals” between the ERC and Meralco.
Bayan Muna Rep. Carlos Isagani T. Zarate filed the resolution seeking to look into the PPAs, alleging that those were “midnight deals” and it could be “disadvantageous to the public and may cause power rate hikes.”
However, Ivanna G. Dela Pena, first vice-president of Meralco, told legislators yesterday that the discussions on the PPAs were long-running.
“Meralco’s seven long-term power supply agreements filed before the Energy Regulatory Commission in April 2016 are not midnight deals. Discussions with the power project proponents started as far back as 2012,” said Ms. Dela Pena.
The distribution utility filed its application with the ERC in April 2016 for the approval of the PSAs with two subsidiaries of Meralco Powergen Corp. (MGen) — Redondo Peninsula Energy, Inc., and Atimonan One Energy, Inc.
“These PSAs were executed to ensure least cost of power for customers and to shield customers from price spikes in the WESM (Wholesale Electrcity Spot Market). They represented the least cost among all offers received by Meralco,” she said.
Moreover, Ms. Dela Pena also said that the extension of the deadline to comply with the Competitive Selection Process (CSP) in October 2016 “benefitted not only Meralco but especially electric cooperatives and private distribution utilities.”
“If the deadline for mandatory CSP has not been extended, numerous distribution utilities would have been wholly dependent on the WESM, subjecting them to the vagaries and uncertainties of WESM prices,” said Ms. Dela Pena.
For its part, the ERC said that it has not yet approved the seven PSAs submitted by Meralco.
“The ERC at that time only accepted applications… Acceptance of applications does not mean it has guarantee of approval,” ERC Commissioner Alfredo J. Non told lawmakers.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Raynan F. Javil
