House probe of ERC power supply agreements skips issue of accountability vs officials

Published March 24, 2018, 7:16 PM

by Roel Tibay

By Ben Rosario

Results of a congressional probe into the alleged irregularities in the awarding of seven multi-trillion peso power supply agreements of the Manila Electric Company (Meralco) skipped the issue of accountability of top Energy Regulatory Commission officials, thus, raising suspicions of a whitewash.


The prospect of whitewash emerged after the House Committees on Good Government and Accountability and on Energy left out findings on the issue of accountability of ERC officials which was a major reason for the conduct of the legislative inquiry.

The top ERC officials were suspected of deliberately delaying the implementation of the agency’s competitive selection process (CSP).

Such delay in implementing CSP allowed Meralco to file at the last minute the applications for PSAs that the distribution utility awarded without bidding to seven generation companies, six of them either its own subsidiaries, sister companies or affiliates.

The CSP is a policy designed to get the least cost of electricity for consumers as it requires distribution utilities like Meralco to get two offers for supply of electricity before awarding a PSA.

The two committees recommended that instead of looking at the propriety of the ERC action, the two House committees said that, “[o]n the PSA application[s] pending before the ERC, the Committees will defer to the jurisdiction of the ERC.”

The joint committee report was signed by Rep. Lord Allan Jay Q. Velasco, chairman of the Committee on Energy; Rep. Johnny Pimentel, chairman of the Committee on Good Government and Public Accountability; and Majority Leader and Quezon Rep. Danilo Suarez.

During the hearings, congressmen grilled ERC officials as they assailed the so-called sweetheart deals the agency allegedly entered with Meralco.

Lawmakers were quite positive about the charges against the ERC that Speaker Pantaleon Alvarez and other congressmen decided to allot only P1,000 for the agency’s budget for 2019.

The P1,000 budget proposal was lifted at the last minute as House leaders decided to give ERC officials another chance to address issues leveled against them.

However, in the joint committee report, the issue of accountability was sidestepped, surmising that the ERC can go ahead and approve Meralco PSAs as if no irregularities attended the CSP deadline extension favouring Meralco.

“The rules and regulations for the approval of the PSAs are already in place in the DOE [Department of Energy] and ERC,” the joint report said.

It continued: “The [c]ommittees were apprised on the processes undertaken by Meralco in the execution of the subject PSAs and the action taken by ERC on the application for the approval of these PSAs.”

The report added that there is a need to review these rules but only in making them “more comprehensible to avoid confusion and differing interpretations.”

The report also did not mention other facts discovered by the committees during their inquiry into the Meralco deals.

These included information from the presentation of Carlos Isagani Zarate of Bayan Muna that showed that the cost of the PSAs would not average P3.67 per kilowatt but at least P5.12/kwh, which is expensive.

Zarate’s presentation also indicated that, over the 20- to 21-year duration of the PSAs, these Meralco contracts will cost its customers not just P2.28 trillion but up to P3.19 trillion.