(Photo from Meralco)

Santa Rosa lone district Rep. Dan Fernandez is prodding the Energy Regulatory Commission (ERC) to halt the alleged questionable 1,800-megawatt (MW) power supply agreement (PSA) that the Manila Electric Company (Meralco) intends to bid out. 

According to Fernandez, ERC should stop the power distribution giant from proceeding with the bidding until a review and study of its terms of reference (TOR) are completed.

Fernandez said a close examination of the TOR would show that it is anti-competitive and discriminatory.

The veteran congressman grabbed headlines recently for accusing Meralco--which services the entire National Capital Region (NCR)--of overcharging its 7.6 million customers for the past nine years. He described the company as both a "monopoly" and a "monopsony". 

Fernandez claimed that Meralco was "the one dictating terms to the suppliers".

In a hearing of the House Committee on Legislative Franchise last Nov. 22, Fernandez said Meralco’s invitation to bid for a 1,800-MW PSA stipulated that only power plants in operation not earlier that Jan. 22, 2020 are qualified to bid. 

"Your invitation to bid was for 1,800 MW, your provision for your [PSA] calls for 1,800 MW and if I may read, what you also said in that provision of your bidding -- single or portfolio plant provided a power plant should be in commercial operation not earlier than Jan. 22, 2020," he told Meralco representatives at the hearing. 

Fernandez claimed that this stipulation by Meralco effectively proved his monopsony allegations as this automatically excluded many of the power plants that should be participating. 

"You have said in your [PSA] in the bidding, 'Hey power plants that have not started operations in January 2020 to May 2025, you can't join, you are all excluded," noted the lawmaker 

"That is trademarking, that is branding. That's tailor-fitting, that's illegal in accordance with the PCC (Philippine Competitive Commission) and international agreement, which states that trademarking is prohibited, it does not allow ‘tailor-fitting'," he said. 

"Your responsibility to us (is only as) a distribution utility only. You have to get least cost...How can you get least cost if many power plants are excluded?” he asked. 

CSP compliant

During the same House panel hearing, Meralco Head of Utility Economics Lawrence Fernandez assured the legislators that the power distributor follows the mandated competitive selection process of CSP. 

"Yung sa pagbili naman po ng distribution utilities (DU) tulad ng Meralco ng kuryente from generators, yun naman po ay very strictly regulated," Lawrence Fernandez, Meralco head of utility economics, said after the company was confronted with allegations of conflict of interest by Caloocan 3rd district Rep. Dean Asistio.  

Fernandez, a resource person during the hearing, said the company has followed the rules set by the Department of Energy (DOE) and Energy Regulatory Commission (ERC).  

"Sa ngayon sumusunod kami sa CSP policy po ng Department of Energy (DOE) na sinasabing lahat po ng [PSA] na papasukin ng isang distribution utility (DU) ay dapat dumaan po ng competitive selection process," Fernandez said.  

(As of now, we follow the DOE's CSP policy, which states that all PSAs entered into by a DU must undergo a competitive selection process.)  

Fernandez said that even after the ERC took over the implementation, Meralco was still compliant.