House hearing exposes possible ERC violations

Published May 31, 2018, 12:05 AM

by Mario Casayuran and Vanne Elaine Terrazola

By Ellson A. Quismorio

Bayan Muna Party-list Rep. Carlos Zarate has claimed a measure of victory following the conclusion of the joint House panel investigation on the seven questioned power supply agreement (PSA) applications before the Energy Regulatory Commission (ERC).

Speaking to reporters after the final joint hearing Tuesday, Zarate said the possible violations ERC committed in the handling of Manila Electric Company (Meralco)-linked PSAs would not have come to light if the matter wasn’t taken up in the chamber.

“In a way, I think we achieved one of our main objectives na i-raise ito. Hindi alam ito ng consumers noon, eh. Parang untouchable kasi yung Meralco, ‘wag tignan yan.’ But dahil sa ginawang committee hearings, naglabasan (The consumers didn’t know about this then. Meralco appears untouchable, ‘let’s not look into that.’ But because of the committee hearings, everything came out),” the militant solon said.

Since last year, the Committees on Good Government and Public Accountability and on Energy probed the seven pending PSAs before the ERC.

The applications, which involve deals on the construction of coal-fired power plants, are connected to Meralco-affiliated generation companies.

These are Redondo Peninsula Energy Incorporated (which is applying for a 225-megawatt [MW] plant), Atimonan One Energy Incorporated (1,200 MW), St. Raphael power Generation Corporation (400 MW), Central Luzon Premiere Power Corporation (528 MW), Mariveles Power Generation Corporation (528 MW), Panay Energy Development Corporation (70 MW), and Global Luzon Energy Development Corporation (600 MW).

Zarate, who filed House Resolution (HR) No. 566, claimed that the ERC bent its own rules to accommodate these alleged “sweetheart deals,” which he described as onerous and disadvantageous to consumers.

He said the ERC allowed for the belated filing of the PSAs, which should have been lodged before the Commission on or before April 29, 2016.

“In fact, I only learned from the testimony of an ERC employee during the Committee hearings that there was an order to time stamp the applications April 29, when in truth they were received on May 2. So I think we achieved that purpose,” said the Davao-based lawmaker.

Zarate had earlier computed that consumers would shoulder P930 billion in additional power rate expenses within the 20 to 21-year duration of the power supply deals if ERC approves them.

The militant solon again called out ERC for choosing not to have the PSAs undergo bidding or the required competitive selection process (CSP).

“Why does ERC refuse to do this? That’s the problem, our regulatory bodies are captured by the industry that they are supposedly regulating. If consumers didn’t make noise, this will just slide.”

Complementing committee reports

Presided by Good Government panel chair, Surigao del Sur 2nd District Rep. Johnny Pimentel, the joint body on Tuesday approved the committee report on HR No. 566 pending amendments, as well as a separate but closely related committee report based on HR No. 1161 filed by House Minority Leader Danilo Suarez.

“There’s a finding that there’s a possible commission of malfeasance, misfeasance, and nonfeasance and possible violation of the anti-graft law,” Zarate said of the committee report on his resolution.

Suarez, who had defended the actions of the ERC in past hearings, claimed that “certain sectors” — presumably from business — don’t want the power plants to be green-lit. He pointed to the 1,200-MW Atimonan plant in particular.

“Ayaw nilang umandar ito… kasi mumura ang kuryente (They don’t want this to move forward… because electricity will become cheaper. I’m not accusing those who are operating now that they are scared. If this plant operates, their profit margin would be affected,” the Quezon province representative said during the Tuesday hearing.

Suarez reiterated the necessity and urgency to build more power plants to avert rotating brownouts in the future should the country’s power reserves plummet.

But Zarate said that the joint panel made it so that the committee report on Suarez’s resolution complement his and vice-versa, since both dealt with the subject of the PSAs.

“It’s two different resolutions. Pero kung titignan mo na yung dalawang committee reports nayun, hindi na sila magkalayo (But if you look at the two committee reports, they’re not far off from each other),” he said.

“Originally ang gusto niyang (Suarez) resolution is to approve [the PSAs] (Originally the resolution he wanted is to approve the PSAs). Of course, we objected. How can you approve these seven PSAs na mayroon talagang violations (if there are really violations)? So eventually [what the committee said] is not to approve but to call ERC to resolve this based on the findings of the investigation,” explained Zarate.

He said harmonization of the two reports was necessary so that the joint panel won’t produce conflicting findings. (Ellson A. Quismorio)