Supreme Court issues TRO on MERALCO power rate hike

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Until the Manila Electric Company (MERALCO) explains in an oral arguments set early next year the reason behind the power rate increases it has recently imposed on consumers, the Supreme Court has temporarily restrained the utilities company from going through the implementation of the power rate increases it has earlier planned.

Meralco earlier explained that the increases are warranted at the impending closure of the Malampaya offshore gas field project that recently underwent maintenance.

 The rate hike met opposition after several lawmakers called attention to a possible collusion among power suppliers.

The lawmakers said the power suppliers experienced “unplanned outages” during Malampaya’s unscheduled maintenance, forcing MERALCO to source more expensive electricity from the Wholesale Electricity Spot Market.

 According to Energy regulatory officials, the power suppliers are also players on the spot market where MERALCO purchases power at a higher rate in a possible conflict of interest.

Gaming in the spot market and shutting down without justification are clear indications of “collusion,” officials said during a recent Senate hearing.

Meanwhile, MERALCO assured the public it would comply with the TRO, stop the implementation of the price hikes, and refund consumers who have paid, based on the increased rate.  In other words, it will revert to the old generation charge of P5.67 per kilowatt hour.

MERALCO clarified, however, that the refunds would only be paid after the Supreme Court finally decides on the case.

MERALCO had planned a total price hike of P4.15 per kilowatt hour on a two-tranche scheme.  The first tranche of P2.00 was supposed to have begun this December. 

The power company will send a notice to those who have yet to pay their bills and provide them with options:  (1) to simply settle the bill and get refunds in future bills; (2) pay the same amount as the November billing provided that consumption in November and December are the same.

Photo: from newsinfo.inquirer.net