P4P urges ERC to veto ‘expensive’ Meralco power deals

INQUIRER FILE PHOTO

Updated on July 2, 2024 at 4:56 p.m.

Watchdog Power for People Coalition (P4P) sought the energy regulator’s intervention to block Meralco’s supply contracts with generation companies using fossil fuels, as it warned of a further spike in electricity bills.

In a statement, the group said it filed petitions at the Energy Regulatory Commission (ERC) on Monday to reject Meralco’s deals with the following four companies owned by San Miguel Corporation and Aboitiz Power: Excellent Energy Resources, Inc., GNPower Dinginin, Southern Power Premiere Corporation, and Mariveles Power Generation Corporation.

P4P said the contracts were worth 3 gigawatts of power, and are still up for the ERC’s approval.

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It alleged that the terms of these power deals were “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,” P4P Convenor Gerry Arances said Tuesday.

The group added that the contracts give authority to the plants to “automatically pass” costs to consumers. If the ERC greenlights these contracts, P4P said consumers would suffer from costly electricity bills for another 15 years.

“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,” he said.

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A supposed conflict of interest in the bidding process was also floated by the P4P, specifically for two power plants. This, as Meralco generation arm MGen and the Aboitiz Group revealed a joint venture in March to acquire two San Miguel-owned gas assets to develop a massive liquefied natural gas (LNG) facility in Batangas City. The two projects are the Ilijan gas plant under Southern Power Premiere Corporation (SPPC) and the under-construction Excellent Energy Resources Inc. (EERI) plant.

In response, Meralco said P4P’s allegations were “baseless,” stressing the company is bound to get “the least-cost available supply” through fair bidding.

Meralco vice president and head of corporate communications Joe Zaldarriaga said that the group “strictly observe and follow” the rules set by the government.

The power distributor also said it held no biases when conducting the selection process, with the four companies winning the contracts for submitting the lowest bids.

“The CSPs involve an open and competitive process with the ultimate goal to secure the lowest bid from qualified generation companies, with no preferential treatment. Thus, the allegations that contracts emanating from CSPs are anti-competitive have no basis,” Zaldarriaga said.

“We would like to assure our customers that all power supply contracts resulting from our CSPs undergo a strict review and approval from the ERC before being implemented to ensure that rates are fair and reasonable,” he added.

In a message, ERC chairperson and CEO Monalisa Dimalanta said the concerns of P4P would be “taken into consideration.”

“We are still in the process of evaluating the Meralco PSAs (power supply agreements)… We encourage consumers to also participate in the formal process — as intervenors or oppositors in the proceedings — so we can ventilate all issues,” she said.