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Court stops suspension of 4 ERC commissioners

THE Court of Appeals (CA) on Friday stopped the suspension of the four Commissioners of the Energy Regulatory Commission (ERC) so as “not to impair public service.”

In a resolution by the appellate court’s 9th Division, dated February 9, 2018, the court issued a temporary restraining order (TRO) against the Office of the Ombudsman, which suspended for a year ERC Commissioners Alfredo J. Non, Gloria Victoria C. Yap-Taruc, Josefina Patricia M. Asirit, and Geronimo D. Sta. Ana. for alleged graft.

Associate Justice Mariflor Punzalan Castillo penned the decision that was also signed by Justices Danton Bueser and Henry Inting.

In its ruling, the CA said that “grave and irreparable injury” may be committed if the TRO would not be issued in favor of the commissioners who were also the petitioners.

Since the suspension of the four ERC commissioners last December 11, 2017, Malacanang has not named their replacements.

The Ombudsman suspended the commissioners for allegedly giving due preference to the Manila Electric Company (Meralco) and its power supply agreements (PSAs) with affiliated power generation companies by extending the deadline for their compliance with the competitive selection process (CSP).

The Ombudsman said the ERC commissioners were “administratively liable for conduct prejudicial to the best interest of the service, aggravated by simple misconduct and simple neglect of duty” based on civil service rules.

It also ruled that the ERC commissioners “cannot feign ignorance” when Meralco took advantage of the resetting of the effectivity date of the competitive selection process (CSP).

Also penalized was then ERC chairman Jose Vicente Salazar, whom President Rodrigo Duterte dismissed from the service on October 2017.

Non-government organization Alyansa Para sa Bagong Pilipinas filed the complaint, which stemmed from an ERC decision to reset the CSP’s effectivity date from November 6, 2015 to April 30, 2016, exempting the PSAs from public bidding as required under the CSP.

The Ombudsman said the ERC commissioners exercised “gross inexcusable negligence” in delaying the CSP’s implementation since the process was put in place to make the PSA costs more reasonable.

“Hence, accommodating companies’ request to be exempted from CSP was a deviation from respondents’ duty to promote public interest through the CSP requirement,” it said.

The Ombudsman said it was clear that the commissioners favored Meralco.

“There is sufficient evidence that respondents gave unwarranted benefits to Meralco and other companies by exempting them from the coverage of the CSP requirement, which was already in effect after 06 November 2015. The 45-day period gave Meralco and other companies the opportunity to dispense with CSP,” it said.

Under the CSP, distribution utilities may execute a PSA with a generation company after complying with the requirements. The distribution utility is required to open the bidding from generation companies to ensure the least cost of electricity. The ERC will not allow distribution utilities to file applications for PSA without complying with the CSP requirements.

But ERC extended the deadline to comply with the CSP until April 30, allegedly to accommodate Meralco, which included its two subsidiaries — Powergen Corp. (MGen) – Redondo Peninsula Energy, Inc., and Atimonan One Energy, Inc.

The seven Meralco PSAs—all coal-fired power plants—are: Redondo Peninsula Energy Incorporated, Atimonan One Energy Incorporated, Central Luzon Premiere Power Corporation, St Raphael Power Generation Corporation, Global Luzon Energy Development Corporation, Mariveles Power Generation Corporation and Panay Energy Development Corporation.

Environmental groups have warned that the approval of Meralco’s PSAs would harm people’s health and the environment because of the combined 3,551 megawatts of coal that would be produced by these plants.

The Ombudsman also said to dispense with the CSP requirement did not conform with the Electric Power Industry Reform Act of 2001 (EPIRA), which aims to bring down power rates and improve delivery of supply through greater competition and efficiency in the industry.

“The CSP is an acknowledged mechanism to make the cost of PSAs more reasonable. Hence, accommodating companies’ request to be exempted from CSP was a deviation from respondents’ (ERC commissioners) duty to promote public interest through the CSP requirement,” the Ombudsman said.

“By not implementing the CSP requirement which favored the filing of the PSAs of Meralco, respondents tarnished the image and integrity of their public office and reneged on their duty to protect the consumers by implementing the policy of the government against anti-competitive behavior in the electricity market.”

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