THE Manila Electric Co. on Tuesday responded to allegations of certain interest groups which questioned the seven power supply agreements (PSAs) pending with the Energy Regulatory Commission since April 2016.
At a hearing conducted by the House committee on energy, presided by 1-Care party-list Rep. Carlos Roman Uybarreta, the country’s power distributor denied these PSAs were “midnight contracts” and would result in “costlier and dirtier energy from coal.”
Lawyer William Pamintuan, Meralco vice president and head of legal and corporate governance, told lawmakers the allegations were baseless and totally unsubstantiated.
The House energy committee conducted the probe as Bayan Muna Rep. Carlos Isagani Zarate sought a congressional probe into the decision of the ERC to approve the construction of a P1.7-billion transmission line for a power plant project of a subsidiary of Meralco.
“Does the decision to approve the transmission line project for the 1,200-megawatt project of Atimonan One Energy Inc. [Atimonan One] mean that ERC has already approved the supply agreements not only between Meralco and Atimonan One, but, also between Meralco and six other Meralco-controlled generation companies?” Zarate asked.
Zarate said the seven PSAs that Meralco awarded without bidding to Meralco-controlled generation companies would oblige Meralco customers to pay at least P91 billion in generation charges every year.
But Pamintuan said these PSAs were legally filed in accordance with the rules and regulations of the ERC with the objective of ensuring adequate and reliable power supply at least cost to Meralco’s more than six million customers.
“Each of these PSAs had undergone a very rigorous, lengthy and, at times, contentious negotiation process with the Generation Companies which actually took many months and years before these agreements were signed and filed with the ERC,” Pamintuan said.
“Negotiation for one PSA actually started in 2012 and was only concluded and signed in 2016. There is therefore absolutely no factual basis to claim these are ‘midnight contracts’,” he added.
He said Meralco negotiated these PSAs “in utmost good faith and the resulting rates and other terms and conditions filed before the ERC are very competitive and favorable to the consumers. “
Pamintuan said there were more than 90 PSAs filed by different distribution utilities and electric cooperatives following the ERC Resolution restating the effectivity of the Competitive Selection Process.
“But out of these 90 PSAs, it is only the seven Meralco PSAs that curiously had been specifically singled out and questioned by certain interest groups. It is on record that Meralco was not among those that asked the ERC to restate the effectivity of the CSP mandate,” Pamintuan said.
Meralco also belied the claim the approval of the seven PSAs would result in “dirtier energy from coal” considering that Generation Companies that it had contracted to supply power to its customers would be utilizing state-of-the-art technology with high efficiency and low emission power plants.
This developed as the Department of Energy stressed the need to streamline regulatory processes for energy projects to speed up the provision of stable and affordable energy throughout the country.
Upon his assumption as Energy chief, Secretary Alfonso Cusi said he had been strongly pushing for a sound policy that would ensure energy projects were carried out on time.
Supporting this call, President Rodrigo Duterte issued on June 30 Executive Order 30, creating an Energy Investment Coordinating Council led by the DoE that will spearhead and coordinate national government efforts to harmonize, integrate and streamline regulatory processes, requirements and forms relevant to the development of energy investments in the country.