ENERGY watchdog Power for People Coalition (P4P) said it would challenge the joint venture agreement among San Miguel Corporation, Manila Electric Company (Meralco) and Aboitiz Power Corporation to control the supply of imported liquefied natural gas (LNG) being used for power generation.
The 3 major companies have joined forces to operate LNG facilities in Batangas province.
P4P convenor Gerry Arances said his organization is committed to its role as watchdog in the power industry, adding: “The movement, the P4P Coalition, is now studying the possibility of opposing the agreement once it is lodged to the ERC (Energy Regulatory Commission).”
He said his group is also likely to file an anti-competition case against the agreement before the Philippine Competitive Commission (PCC).
“We need to defend the electric consumers, (we need to fight for) our right to clean and affordable energy,” said Arances.
Arances said questioning the JVA is a step in the right direction in protecting consumers from an endless cycle of power rate hikes.
The Batangas facilities will handle imported LNG which is a more expensive fuel for power generation.
“Once the merger and acquisition of the LNG (power plants) are completed, this will result in the hiking of electricity rates that will severely affect electric consumers,” the P4P convenor noted.
Arances also said LNG is vulnerable to market forces globally, citing as an example the developments in the US LNG industry where the government stopped the expansion of LNG terminals.
Arances noted that such developments only point to one thing — that LNG prices will rise.
The group also expressed concern over the timing of the JVA which came as Meralco awarded 2.4 gigawatts worth of new power supply agreements to two plants owned by its partners in the JVA.
Meralco will acquire a 40 percent stake in the Ilijan LNG Power Plant and Excellent Energy Resources LNG Power Plant through the deal, which would effectively make the distribution utility the owner of the power plants.
“In January, Meralco gave away 80 percent of its new power requirements to these two SMC gas plants based on terms that give consumers the short end of the stick,” Arances lamented.
“Now, we learn that Meralco, all this time, was intending to buy those plants, and would be directly benefiting from expensive costs of fuel passed on to consumers,” he added.
SMC, Aboitiz, and Meralco are also seeking to acquire the adjacent liquefied natural gas import and regasification terminal owned by the Atlantic Gulf & Pacific Company with Linseed Field Power Corporation.
According to Arances, this violates the intentions of the Electric Power Industry Reform Act to prohibit cross-ownership between generation and distribution sectors and secure competition to ensure least-cost electricity for consumers while guarding against power sector abuses.
