Solon prods Duterte: Order probe of power deals

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    BAYAN Muna party-list Rep. Carlos Zarate yesterday urged President Duterte to order an immediate review of all the Power Supply Agreements (PSAs) entered into by generation companies amid the yellow power alert in Luzon for the second straight day last Tuesday.

    “President Duterte should order regulatory bodies and responsible agencies to diligently review all the (PSAs) that power utilities entered into and see if indeed they are the best deals for Filipino consumers,” Zarate said in a statement.

    The militant lawmaker cited the alleged seven “midnight deal PSAs” of subsidiaries of the Manila Electric Company (Meralco), particularly the Atimonan One power plant.

    Meralco earlier said the yellow alert was due to insufficient operating reserves caused by power plant outages.

    The congressman warned the reported P15 billion additional cost of Atimonan One’s interest on loans and increased cost of imported equipment will translate to a P1.80 per kilowatt hour increase in capacity cost, raising its power rate to P7.46 per kwh.

    Zarate, who called for an investigation into the PSAs in the previous Congress, warned an additional P1.80 per kilowatt-hour will burden power consumers once “Meralco passes on the escalating construction cost of its subsidiary, Atimonan One Energy Inc.”

    “This would be exorbitant compared to other players who offer electricity for as low as P2.95/kwh,” he said. “Consumers are always at the disadvantage, especially now that there’s a yellow alert and we’re expecting another round of electricity price hike like what happened last month. It’s because of the power plant outages but that has been happening since 2012.”

    Last Congress, the House committees on good government and on energy, in Committee Report No. 632, recommended that the Energy Regulatory Commission (ERC) quickly resolve the application of the seven PSAs for as long as Meralco has complied with all the requirements prescribed by laws, rules and regulations and appropriate hearings have been conducted.

    The seven PSAs will lead to an additional 3,551megawatts (MW) of baseload power supply intended to secure the power requirements of more than five million electricity consumers in the next three to five years.

    A House inquiry into the seven PSAs had already tackled the supposed sweetheart deals between Meralco and its sister companies which some lawmakers blamed on the ERC for allegedly allowing Meralco to enter into PSAs with firms co-owned by the firm.

    Zarate claimed that the opportunity for other generation companies to compete with the sister companies of Meralco has already been eliminated.

    Because of this, he said a monopoly was allowed and consumers will be tied to Meralco for the next 20 to 25 years without bidding, effectively rendering the Competitive Selection Process useless.

    The seven Meralco-affiliated generation companies are Redondo Peninsula Energy Incorporated (for a 225-megawatt [MW] plant); Atimonan One Energy Incorporated (1,200 MW); St. Raphael power Generation Corporation (400 MW); Central Luzon Premiere Power Corporation (528 MW); Mariveles Power Generation Corporation (528 MW); Panay Energy Development Corporation (70 MW); and Global Luzon Energy Development Corporation (600 MW).