THE Power for People Coalition has filed a petition before the Energy Regulatory Commission (ERC) seeking to deny Meralco’s power supply contracts with four fossil fuel plants that will result in more expensive electricity for consumers.
Earlier this year, the country’s largest distribution utility initiated a bidding process that awarded contracts worth 3 GW to fossil fuel plants owned by San Miguel Corp. and Aboitiz Power.
Two gas plants owned by San Miguel clinched 80 percent of said capacity while one of the involved gas projects previously walked away from a Meralco contract last year after losses.
“The terms of these power contracts are unfavorable to consumers and small businesses. Everyone loses except big power players: Meralco, San Miguel, and Aboitiz, who are leaving consumers no choice but to pay for more expensive electricity while their profits are soaring,” said P4P Convenor Gerry Arances.
“Meralco and other corporations are completely squeezing consumers – as the price of electricity increases, less is spent on basic needs such as food. This should not be allowed to happen to the Filipinos, especially since the increase in the salary of the workers is going up,” Arances said.
The contracts allow the plants to automatically pass on fuel costs to consumers, which is against the “least-cost” provision of the Electric Power Industry Reform Act (EPIRA). If contracts get approved, consumers will be locked into 15 more years of high power prices.
“This is precisely what Sanlakas warned about two decades ago when Congress railroaded EPIRA under the guise of preventing another energy crisis. Privatization inspires corporate greed and these contracts are further proof that these generation companies will willingly throw consumers under the bus to protect their bottom lines,” said Sanlakas Secretary-General Atty. Aaron Pedrosa.
The petition also raises the question of conflict of interest in the bidding process for two specific plants after Meralco’s power generation arm announced in March a joint venture with Aboitiz to buy into two San Miguel-owned gas assets to develop a massive liquefied natural gas (LNG) facility in Batangas City. The two projects, the Ilijan gas plant under Southern Power Premiere Corporation (SPPC) and the under-construction Excellent Energy Resources Inc. (EERI) plant, both clinched 1.2 GW contracts each.
“Even Meralco has to admit that the sequence of events is too fortuitous for San Miguel to not raise eyebrows. San Miguel announced that Meralco is a new co-owner of the two plants it just awarded big contracts to merely two months after EERI won its bidding round, with SPPC following a few weeks after,” Arances said.
The groups argue that the terms of the contracts are anti-competitive in the first place, deliberately keeping out renewable energy projects from entering.
“The terms of reference of the contracts set energy requirements, technical parameters, and minimum capacity offers that clearly favor big fossil fuel players. That’s already too many red flags for the ERC to ignore,” Pedrosa said.
“We are asking the ERC to reject these contracts as part of their responsibility of protecting the public. Otherwise, they will condemn a new generation of consumers to 15 years or more of expensive power.” Arances said.
