Independent power producers deny collusion in power plant shutdowns

Industry group Philippine Independent Power Producers Association, Inc. has denied collusion in the shutdown of power plants that led to a power rate hike.

“There are buyers and there are sellers, right? Obviously, the buyers benefited, the sellers lost out,” PIPPA president Luis Miguel Aboitiz said in a “24 Oras” report aired Friday evening.

“But when you say there was collusion… Who colluded? There are 31 generators. If somebody claims collusion, he should say who did it or how the collusion was done,” he added.

According to the PIPPA website, Aboitiz is president and chief executive officer of Aboitiz Energy Solutions, Inc. and senior vice president for power marketing and trading of Aboitiz Power Corporation.

In December, Senator Sergio Osmeña III, chairman of the Senate Committee on Energy, said he saw no indications of collusion among power producers.

“Will you shut down your bus so I can run my jeepney? I don’t think so. If you also own the jeepney, baka. Pero if you don’t own the jeepney, why will you shut down your bus line?,” he said.

The Supreme Court has issued a temporary restraining order on a P4.15 per kilowatt hour increase imposed by the Manila Electric Co.

Meralco said it had to raise prices because it had to buy more expensive electricity from power producers after plants shut down in December.

PIPPA said its members have to be paid soon. “If it’s not resolved in a long period of time, then some of the generators with weaker balance sheets will have problems,” Aboitiz said.

Aboitiz said he thinks power plants will not shut down while waiting for the Supreme Court to decide on the Meralco rate hike. “But if they have no fuel, they can’t generate,” he said, adding that could happen to diesel-run plants.

PIPPA said power producers can still bear not being paid since the Supreme Court TRO was issued in the colder months, when demand for electricity is lower. Higher demand during the summer months will mean higher prices, though.

For Energy Secretary Carlos Jericho Petilla, it will be best for everyone if the Supreme Court rules on the rate hike as soon as possible.

It has to be resolved quickly because there is a financial gap. The worst-case scenario, which I don’t think will happen, is that the generators will not provide Meralco any power,” he said.

Petilla assured the public, though, that the impasse between Meralco and independent power producers will not result in brownouts.

“I’m not lawyering for them. Ako nga itinuturo nila na naga-accuse daw sa kanila [ng collusion]. But I’m trying to make sure also na yung financial burden na iyan ay naaayos nila because I want to make sure that service is not disrupted,” he said.

The Supreme Court has set oral arguments on the Meralco rate hike on Jan. 21. — JDS, GMA News