Colmenares, Bayan Muna welcome SC Decision striking down ERC-Meralco Midnight deals

May 7, 2019

Bayan Muna chairman and Makabayan senatorial candidate Neri Colmenares and Rep. Carlos Zarate welcomed the decision of the Supreme Court scrapping the “sweetheart deals” that Meralco negotiated with its own generating companies in 2016 and similar deals by other power distribution companies.

The Supreme Court in their special En Banc session on 03 May 2019 and in a decision penned by Senior Associate Justice Antonio T. Carpio, ruled that the Energy Regulatory Commission (ERC) gravely abused its jurisdiction in allowing Meralco and other power distribution utilities to skirt the Competitive Selection Process (CSP) that mandated them to undergo competitive bidding to ensure the lowest cost of electricity to its customers.

Petitioner Alyansa Para sa Bagong Pilipinas, Inc. questioned before the High Court the ERC’s act of extending its deadline for compliance with the CSP twice, from June 30, 2015 to November 2015 and finally April 2016. This allowed Meralco to submit seven negotiated Power Supply Agreements (PSAs) with its own affiliated generating companies without competitive bidding. All in all, some 90 PSA applications were accepted by the ERC in violation of the CSP’s bidding process.

The SC said that by extending the deadline for Meralco to submit its seven negotiated PSAs, the ERC overstepped its powers and, in effect, delayed the implementation of CSP by 20 years or even more, considering the duration of Meralco’s power contracts with its own affiliated companies.

The SC reiterated that all PSAs submitted by Meralco and other distribution utilities to the ERC on or after the original cutoff date of June 39, 2015 must undergo a CSP.

“This is a very positive development because it spared consumers another burden that we would have to bear for 20 years. We commend ABP for its vigilance. Their victory is a victory for all electricity consumers in the country,” said Colmenares, who also serves as ABP’s legal adviser.

“We believe that some ERC officials bent backwards several times to accommodate these Meralco power deals. The ERC should now scrap those sweetheart deals and require Meralco to undergo competitive bidding for its power supply,” he added.

Last month, Colmenares and Zarate filed a petition to intervene in the case, citing the findings of the House Committee on Energy that the ERC bended backwards to accommodate Meralco’s “sweetheart deals” with its affiliate companies.

Also last month Colmenares warned Meralco and the Energy Department not to twist information about Luzon’s tight power supply situation to stampede the public into accepting the seven controversial PSAs.

“The recent unscheduled plant shutdowns should not be used by Meralco or ERC to advance their dubious agenda; and that is to get public support for the illegal and overpriced PSAs,” Colmenares stressed.

“The power plants it wants constructed are clearly the very power plants awarded with the onerous PSAs by their parent firm Meralco,” Colmenares bared.

Meanwhile Rep. Zarate said that “the decision of the Supreme Court jived with the joint committee report of the House of Representatives and showed that the ERC and Meralco toyed with the competitive selection process (CSP).”

It can be remembered that Bayan Muna filed House Resolution 566 to investigate the ERC-Meralco midnight sweetheart deals. The House probed unearthed the fact that the ERC accomodated Meralco and bended its own rules.

“We salute and congratulate ABP for pursuing this monumental case all the way to the SC, despite the limited resources and grave pressures in battling a giant like Meralco,” Rep. Zarate said.

“We should not allow the greed of these energy oligarchs to continue. Those government officials who allowed this should be made accountable and charges must be filed against them,” ended Rep.Zarate.