January 17, 2014 The Honorable Members of the Sangguniang Panlalawigan Province of Sorsogon SP Building, Capitol Compound Sorsogon City Attention: Hon Eric O. Ravanilla Chairman, Committee on Energy Dear Honorables: Greetings of Peace! The power industry is currently embroiled in a controversy which centers on the allegation of collusion between and among the power generation companies, distribution utilities and some government agencies concerned with the regulation and trading of electric power. Through the vigilant action by some concerned sectors, the biggest power distribution utility in the country was stopped on its track from imposing an enormous increase in power rate on its consumers with the timely issuance of a temporary restraining order by the Supreme Court in response to petitions consolidated under G.R. Nos. 210245 and 210255. Good for the consumers of the Manila Electric Company (MERALCO) some sectors came to their rescue and woe to us, consumers of Sorsogon II Electric Cooperative, no one moved to stop the electric cooperative from imposing a gargantuan increase on us which dwarfed that which was supposed to be imposed by MERALCO. However, this is not the main concern why I wrote to this august body. As I read the Order made by the Supreme Court in relation to G.R. Nos. 210245 and 210255 dated January 10, 2014, one peculiar fact stood out which, to my mind, would merit attention by this august body. One of the “Whereas-es” stated in the Order of the Supreme Court read thus: “WHEREAS, their (MERALCO) Consolidated Comment/Opposition with Counter Petition included a prayer to join as parties-respondents in these cases, the Philippine Electricity Market Corporation, First Gas Power Corp., South Premier Power Corp., San Miguel Corp, Masinloc Poer Partners Co.,Ltd., Quezon Power (Phils) Ltd. Co., Therma Luzon, Inc., Sem-Calaca Power Corp., FGP Corp. and National Grid Corp. of the Phils, and the following generation companies that trade in the WESM, namely: 1590 Energy Corp., AP Renewables, Inc., Bac-man Energy Development/Bac-man Geothermal, Inc., First Gen Hydro Power Corp., GN Power, Mariveles Coal Plant, Ltd. Co., PANASIA Energy Holdings Inc., Power Sector Assets and Liabilities Management Corp., SN Aboitiz Power, Strategic Power Development Corp., Trans-Asia Power Genration Corp. and Vivant Sta. Clara Northern Renewables Generation, Corp.” May the honorable body please take note of the mention of GN Power in the preceding paragraph. This is the same company that is under contract with Soreco II for the supply of electric power. It should be noted that the bone of contention here is whether or not there was collusion among power generating companies who traded in the WESM which resulted in sudden increase in rate during the period in question, the same period when Soreco II raised its rate on unprecedentedly. The fact that MERALCO wanted GN Power to give its side on the controversy, being one of the power traders during the period in question, is by itself an indication that GN Power actually had sufficient supply of energy at the time. It would seem then that GN Power reneged on its contractual obligation with Soreco II, to the detriment of local consumers, just so it could sell its power to WESM to gain higher profit. Talk of opportunism. This could be the reason why, under its contract with Soreco II, there was no provision that would compel GN Power to supply the cooperative with electric power from an alternative source on the same rate in the event that it fails to fulfill its obligation. I would also like to bring to your attention the mention of Bac-man Energy Development Corp/Bac-man Geothermal Inc. as one of those impleaded in the petition being one of the generation companies that traded in the Wholesale Electricity Spot Market (WESM). It simply means that the Bac-man EDC/Bac-man GI was being made a party to the case, it being an active player in the sale of electric power to the WESM, an attestation that it is already on commercial operation. It should be noted that the same company, which is operating within the jurisdiction of this province, has been refusing to pay its royalty fee to the host communities claiming that it has not yet resumed commercial operation. But the recent development at the Supreme Court which made Bac-man EDC as one of the co-respondents in the petition negates such claim. On the contrary it is apparent that the Lopez-led company has been earning from its operation but was making a fool out of the Sorsogon people. The presence of Bac-man Geothermal Plant in the province has been the greatest irony on the issue of power rates. While the province hosts this vast geothermal complex, we, Sorsoganons, are burdened by one of the highest, if not the highest, power rates in the country. The sole consolation that the province is supposed to enjoy from being a passive host to this ironic situation is the payment of the royalty fee by the operator. But it seems that even this meager amount, the operator would still want to pull a fast one on us. May I therefore request this honorable body to please look into this matter. The measly amount that could be generated from the royalty could still fill the financial needs of the province as well as that of other host communities. Over and above the amount that could be collected, I am of the belief that this giant company should not be allowed to renege on their obligation at the expense of the people whom they are making look like fools. Trusting on the collective wisdom of the Honourable Members, I remain. Thank you. Sincerely yours in public service, Bobby Q. Labalan Managing Editor Media Solutions
Posted on: Thu, 23 Jan 2014 11:35:15 +0000
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