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In the course of the ERC hearings to suspend the fixed-price provision in the contracts, other consumer and civic groups took up the cudgels after the main complainant suddenly lost interest in the case but, on record, remained the main intervenor.
“Resbak” is a common street word in the Philippines that means to retaliate, to return to the scene of a fight or a beating often with reinforcements.
It seems that a regulatory agency is now a “resbak” victim.
A consumer group of known lackeys of a powerful conglomerate was able to clinch a suspension order from the Ombudsman against Energy Regulatory Commission (ERC) Chairperson Monalisa Dimalanta.
The six-month “preventive suspension,” according to the order, was intended to prevent prejudicing the case “which may warrant her removal from the service.”
The petitioner was the same one-man association that was the main party in the plea to the ERC to block two San Miguel Corp. (SMC) power plant units, South Premiere Power Corporation which operates the Ilijan natural gas plant, and San Miguel Energy Corp. (now Sual Power Inc.) that runs the Sual coal plant, from implementing a temporary rate hike.
Both plants had obtained fixed-price Power Supply Agreements through biddings with distributor Manila Electric Co. that did not allow an adjustment in the contracted rates.
In the course of the ERC hearings to suspend the fixed-price provision in the contracts, other consumer and civic groups took up the cudgels after the main complainant suddenly lost interest in the case but, on record, remained the main intervenor.
The move on Dimalanta appeared to be a payback and a smear job combined since the ERC chief until yesterday had not received an “official” copy of the Ombudsman order, forcing her to ask for a copy provided to the media.
The order came a few days after the Supreme Court upheld with finality the termination of the supply contracts of the two SMC energy firms which the ERC had earlier disallowed.
The Court of Appeals (CA) ruled in favor of the SMC companies after the Asian giant went straight to the court instead of appealing the ERC ruling.
In effect, the CA ruling dissolved the two PSAs, thus allowing the SMC units to bid for new supply contracts at more favorable terms.
Consumer groups such as the Power for People Coalition said the original contract terms should have been enforced since they benefited consumers and SMC knew the risks going into the deals.
SMC cited the “change in circumstances” provision in the contracts to seek the recovery of P5 billion in losses due to the increase in fuel prices, primarily of coal.
The ERC pursued the case up to the Supreme Court which may have incensed some powerful figures.
The adjustments that were denied SMC by the regulator were awarded to it through the CA ruling which, in turn, vested on the court the ERC rate-setting power.
Consumer groups said Dimalanta was merely performing her mandate to protect consumers from SMC’s attempt to profit off the rising price of coal and gas by passing these off to consumers.
With the attempt to marginalize the ERC, generation companies can run to the courts with their petitions for rate increases and jack up prices with impunity, rendering power supply agreements moot.
The apparent effort to clamp down on the ERC also sends an atrocious signal to potential energy investors about the overreach of the courts in purely business disputes.
Often cited by investors as a key disincentive in the country is the propensity of the judiciary to issue temporary restraining orders or injunctions to stop an ongoing project.
The general view is that there is no sanctity of contracts in the country and the rules of the game are always dictated by the powerful forces influencing the judiciary.
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Credit belongs to: tribune.net.ph
