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Meralco’s ‘self-dealing’ can raise energy cost – Colmenares

/ 09:55 PM November 13, 2019

MANILA, Philippines — If Manila Electric Co. (Meralco) insists on bidding out its supply contract to Atimonan One Energy Inc., a wholly-owned subsidiary of Meralco PowerGen Corp., consumers may have to face a high energy cost for the next 20 years.

Former Rep. Neri Colmenares, chair of Bayan Muna, said this Wednesday as he advised consumers to remain vigilant and called on the Department of Energy (DOE) to declare Meralco’s terms of reference void and take control of the bidding process.

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“After all the DOE has the power to demand that the purpose of its CSP (competitive selection process) policy be fulfilled in order to get the lowest possible price for electricity and protect the consumers from self-dealing,” Colmenares said.

“Otherwise, we will be suffering from high energy cost for the next twenty years when we could have paid for less to the detriment of the consumers and the economy. There will be continuing electricity price hikes until 2029,” he added.

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Colmenares said the bidding terms imposed by Meralco when it conducted a CSP were “very disadvantageous” to other bidders except for Atimonan One.

He said that the conditions set for the third bid for a 1,200 megawatts 20-year contract were “very steep and almost impossible” and only Meralco’s Atmonan One was able to submit a bid.

“If there is only one bidder, then the purpose of bidding, which is to find the lowest price supply, is definitely defeated,” Colmenares said.

“It is therefore imperative that the bidding terms imposed by Meralco should be amended to ensure fair chance for all suppliers to make a bid at the lowest possible price,” he added.

Colmenares said that consumers should not “be held hostage to expensive electricity” and questioned why Meralco does not set “genuinely competitive” terms for its CSP.

“While the country needs more capacity in the future, it does not mean that the consumers should be held hostage to expensive electricity now,” Colmenares said.

“That is monopoly abuse. And in this industry, nothing is worse than patronage to monopoly abuse,” he added.

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Colmenares said that they asserted in a petition filed before the Supreme Court that “Meralco wants to award its wholly-owned Atimonan One Energy with an expensive PSA for unconscionable profits to the detriment of everyone except Meralco.”

“The tactic of having failed biddings will lay the stage for a negotiated PSA, thereby reviving the ‘sweetheart’ PSA with Atimonan One. A legally flawed PSA struck down not once but thrice, in the Supreme Court, the Ombudsman and the Joint House Committees on Good Government and Energy investigation,” Colmenares said.

He added: “The response should be simple as well — stop Meralco from causing more suffering for the consumers by ordering it to relinquish control of the bidding and open it to other bidders who may offer lower prices than its Atimonan One and for the public to be more vigilant in guarding the energy sector.”

/atm

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TAGS: Atimonan One Energy Inc., Meralco, Neri Colmenares, power supply contract
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