Deadly sin of delays

This year’s Lenten season is over, yet we’re still fervently praying. This time, it’s not about putting an end to water shortages, but also to power outages, something that’s happening because of bureaucratic delays at both the regulatory and judicial fronts.

We’re praying that the Supreme Court immediately acts on a case filed in November 2016 by consumer group Alyansa Para sa Bagong Pilipinas Inc. (ABP) to stop the Energy Regulatory Commission (ERC) from approving power supply agreements (PSAs) solicited by Meralco from several power generating companies.

As power projects that are essential to ensuring adequate energy supplies for Metro Manila and the remaining service area under Meralco, the high court has committed the deadliest of sins: procrastination in the face of urgent public interest.

By foot-dragging on the case, the country suffers.

Even if the Supreme Court decides today that the ABP petition has no merit, the delay of more than two years has already wrought a series of yellow and red alerts leading to rotational brownouts, higher electricity costs, and consequently, economic losses.

Worse, we have the specter of even more brownouts for another two or three years while waiting for new power plant projects to be completed, commissioned, and linked to the grid.

If the Supreme Court rules that there had been collusion between the ERC and Meralco, expect more delays since all parties have to go back to square one in order to secure the necessary prerequisites to finalizing those power supply agreements.

‘Grave abuse of power’

By way of a backgrounder, in 2015, the ERC issued a resolution extending by six months to April 2016, from the original of October 2015, the deadline for imposing a competition selection process (CSP) for power supply contracts.

A few days before the last day of April, Meralco submitted to the ERC seven PSAs it had signed with affiliated power generating companies, all apparently rushed so they would not have to go through a CSP.

Each PSA carried a 20-year period, and all combined were worth 3,551 megawatts. The power plants are Atimonan One Energy Inc., Central Luzon Premiere Power Corp., Global Luzon Energy Development Corp., Mariveles Power Generation Corp., Panay Energy Development Corp., Redondo Peninsula Energy Inc., and St. Raphael Power Generation Corp.

In the ABP petition filed six months later, the consumer group asked the High Court to issue a restraining order on the ERC to not act on Meralco’s PSAs. ABP accused ERC of reneging on its duty under the Electric Power Industry Reform Act of 2001 (EPIRA) to promote competition, encourage market development, ensure customer choice, and penalize abuse of market power.

ABP, likewise, asked the High Court to void the ERC resolution extending the deadline for the implementation of a CSP in acquiring PSAs, accusing the regulator of gravely abusing its discretionary power when it issued the resolution.

Context

The media and advocacy groups often refer to the Meralco PSAs as midnight power supply deals, perhaps unfairly casting malice on the utility company’s reputation as one of the oldest and respected businesses in the country, as well as on the ERC as an astute regulator.

Taken in context to those years during the first half of the decade when the Department of Energy was encouraging investors to build power plants to avert supply shortages, the accepted check and balance to possible collusion between the utility company and a power generating firm was in the hands of the ERC.

Even if CSP bidding process were put place, a requirement eventually put in place to make the process more transparent, the ERC would still have been needed to look closely at the PSAs, having the expertise and the mandate to protect public interest.

The accusation of collusion between Meralco and the ERC has to be proven, but should not be prejudiced by a case involving the utility company and four commissioners of the ERC judged last year by the ombudsman for “neglect of duty” in the alleged misuse of Meralco bill deposits.

The High Court should, likewise, decide wisely if there had been “grave abuse of power” by the ERC when it decided to extend the deadline for promulgation of CSPs when dealing with PSAs.

The ABP, in its petition, alleges that the 20-year contracts could cost Meralco consumers an additional P12.44 billion a year. This too needs to be closely vetted by the Supreme Court and in doing so, it would perhaps need the help of ERC’s technical teams.

Slow justice

With the brownouts happening and elections just around the corner, things are turning out to be emotional. Opposition parties hostile to the current administration are already using the ABP petition as a springboard for publicity – and more votes.

The slow maneuverings in the justice system is turning out to be deadly to the economy, and one that can severely impair the country’s efforts to sustain economic growth in the coming years.

While the judiciary must always ensure its decisions are fair and in the best interest of those concerned and the public at large, it must mete out its decisions without too much delays.

We must not forget how the lack of reliable electricity in the years of the Cory administration hobbled the country’s growth. Given the length of time needed to build a power plant, the various regulatory requirements, and the strategic importance of energy to a growing nation, the government must set its mind to act fast.

Too many delays in infrastructure building, law-making, and most especially in the delivery of justice will be the country’s unraveling.

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