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Sen. Miriam Defensor Santiago on Monday said a mix of "bad practices" of industry players may be the reason for the high power rates in the country.

"It's possible that there is no single entity responsible for the power rates. It is possible that it's caused by a confluence of bad practices on the part of the industry players," Santiago, chairman of the joint congressional Power Commission , said as she opened the inquiry Monday morning.

She also said that that the probe is being done "so that we can propose legislation and amendments to the existing law and even make available remedies."

Santiago said PowerCom would want to identify the power industry players or people "who are answerable and liable" for the high electricity rates. She added that the inquiry would also like to know why rates are high.

She said those who will be found conspiring to charge high power rates may be punished through imprisonment and fine.

Among the resource persons who attended the hearing were Energy Secretary Angelo Reyes, Manila Electric Co. president and chief operating officer Jesus Francisco, National Power Corp. president Cyril del Callar and Winston Garcia of the state pension fund Government Service Insurance System.

Santiago said the panel will also try to find out why electricity rates remain high despite the passage of the Epira law.

“We want to know why we have not achieved the sole of the Epira law passed seven years ago to lower electricity rates in the Philippines�¦ so that we can propose legislations or amendments to the existing laws and we can even avail of other remedies made available,” she said.

Santiago admitted that so far, the PowerCom and ERC, both created with the enactment of the Epira law, have failed to bring down power rates.

"The answer is very simple and its staring us in the face, the answer is no," she said, adding that the Philippines is among the countries in the world that has the highest power rates. She said the country is ranked second in Asia next to Japan.

The commission, Santiago said, will tackle eight topics. These are:

�§ Allegation that MERALCO is buying from Wholesale Electricity Spot Market only during peak season to manipulate the prices of electricity and also the documents to make it appear that independent power producers prices are lower than NAPOCOR and WESM prices;

�§ Passing on to customers the unpaid debts of NAPOCOR;

�§ Luzon rates are higher than the Visayas and Mindanao because of certain MERALCO management decisions;

�§ MERALCO passes on to its customers the systems losses;

�§ Allegation that the NAPOCOR time-of-use rates are very high;

�§ Allegation that NAPOCOR gives preferential and discounted rates to customers in economic zones pursuant to the orders of President Arroyo but charges the cost of this discount to other customers;

�§ Allegation that NAPOCOR revenue requirements in its rate are too high. Is NAPOCOR passing on to customers not only the avoided costs but the actual IPP cost?;

�§ Allegation that NAPOCOR are making unconscionable fuel purchases;

The senators who were present in the hearing were Joker Arroyo, Edgardo Angara, Panfilo Lacson and Rodolfo Biazon.

The contingent from the House of Representatives, meanwhile, was led by energy committee chairman Juan Miguel Arroyo, who is also co-chairman of the PowerCom, Arnulfo Fuentebella, Teofisto Guingona III, Teodoro Locsin Jr., Edgar Valdez and Faysah Dumarpa.

Peak hour purchase not deliberate

On the first allegation, Francisco denied that Meralco has been deliberately buying power from WESM during peak periods.

"The answer, certainly, is in the negative, madam. MERALCO as a distribution utility acknowledges its obligation to secure power at the least cost possible to benefit its consumers,” Francisco said.

He explained that with WESM rules, which requires a distribution utility to declare power requirements 24 hours ahead of the purchase, MERALCO has no way of predicting how much and where the power will come from.

Despite this, he said "majority of our purchases are during the off peak periods." He added that on January 2008, WESM rates are lower.

Francisco also denied that Meralco is prioritizing the purchase of power from independent power producers that are identified with the Lopez Group. MERALCO is a Lopez-controlled company.

"It is partly correct only that we favor our IPPs. We can show in an ordinary WESM day that our first source of power that we identify are the special rates that the NAPOCOR has furnished us for specific customers like ecozones and one-day power sales customer," he said.

Francisco said before the PowerCom that all his statements are on record.

Santiago, for her part, ordered Meralco to submit the documents, which include: the description of supply scheduling and dispatching prices and criteria and the result of hourly procedures by volume and by prices, broken down for IPPs, NAPOCOR and WESM from June 2006 to April 2008.

is the online news department of ABS-CBN Interactive, Inc., a member of the Lopez Group.