Judge Biliran Stops Akelco Rate Increases

By Ambrosio R. Villorente

"Defendants Akelco and Mirant Global (Philippines) Corporation are hereby ordered to cease and desist from further implementing the terms and conditions embodied in the Amended Electric Power Purchase Ag-reement…to stop implementing the increase power rates approved by the Energy Regulatory Commission…" This is the decision Hon. Ledelia P. Aragona Biliran penned on Civil Case No. 7385.
This case is the "Annulment of Contract With Prayer for Issuance of Preliminary Mandatory Injunction and/or Temporary Restraining Order". This case was filed by Mr. Rodson F. Mayor as plaintiff and Cong. Florencio T. Miraflores as plaintiff-Intervenor against Akelco represented by Augusto C. Tolentino, Wilfredo Ortiz, Mirant Global (Phils.) Corporation as defendants and Avon River Power Holdings, Corporation as defendant-Intervenor.
The case decided is a petition for the issuance of temporary restraining order (TRO) filed by Cong. Florencio T. Miraflores – plaintiff intervenor and Rodson F. Mayor–plaintiff to direct Akelco and Mirant Global Corp. to desist from implementing any increase or stop the implementation of the increase of the electricity rates in accordance with the amended contract entered into by Akelco and Mirant Global Corp. The subject of contention are the Energy Power Purchase Agreement (EPPA) dated October 1, 2003, and the amended EPPA signed on August 3, 2004, the two contracts are all between Akelco and Mirant.
The case is being heard in Branch 2, Regional Trial Court, Kalibo, Aklan presided by Judge Ledelia P. Aragona Biliran.
According to the records of the case, the Amended EPPA was approved by the Energy Regulatory Commission (ERC) in its decision dated August 2, 2006. Akelco, without informing its clients, implemented gradually the rate increase starting in Akelco billing for the period October-November 2006.
In the words of Atty. Edgar Peralta, legal counsel of Cong. Miraflores, Akelco fooled the people of Aklan through "systematic deception". In his testimonies, Miraflores admitted he signed the EPPA between Akelco and Mirant as a witness stipulating terms and conditions, one of which "provides that the rates to be imposed would be equal if not lower than what the National Power Corporation (NAPOCOR) was charging.
However, without his knowledge, the contract (EPPA) was amended on August 3, 2004 and the increased rates were applied based on the Amended Contract…which rates are different from and much higher than what was contained in the Original Contract. Moreover, there was also a provision in the Amended Contract giving Mirant the unilateral right to terminate the contract at its own discretion, which is contrary to law."
Furthermore, "the original contract also appears to have been signed by the Board of Directors of Akelco without any authority," no public hearing conducted, the matter was not submitted to the consumer-members before the execution and completion of the original as well as the amended contract.
Miraflores testified, he just suddenly learned ERC has approved the Akelco-Mirant Amended EPPA on August 2, 2006 and which Akelco started to implement the new rate in its October-November 2006 billings. Miraflores made it clear that he is not questioning the EPPA but the increase in power rates and the exclusivity clause which provides that Akelco must only buy its power needs from Mirant even if there are available electricity from other power producers at much cheaper cost than that supplied by Mirant Global Corporation.
Since September, 2006 to April, 2007, Akelco increased its power generation charge from P2.99 to P4.74 per kilowatt hour or an increase of P1.75 or 58 percent.
Meanwhile, Akelco announced the reduction of its power rate at P1.30 per kilowatt hour in the May 2007 billing.
According to Judge Biliran, the grant of preliminary injunction is an extraordinary remedy calculated to preserve the status quo and to prevent actual or threatened acts violative of the rules of equal and good conscience. "Its sole purpose is not to correct a wrong of the past…but to prevent further injury." Hence, the TRO. Akelco must go back and charge electric power generation rate equal if not lower than what NAPOCOR charges. It is also expected Akelco refunds the consumer- members with the money paid higher than what NAPOCOR is charging.
The next hearing of the case is set at 8:30 in the morning, Tuesday, June 19, 2007 in RTC, Branch 2, Kalibo, Aklan. /MP