ENERGY consumer rights advocate Pete Ilagan this week asked President Ferdinand Marcos, Jr. to reevaluate what not a few calls a misplaced judgment by the Energy Regulatory Commission (ERC) on the joint petition by two industry stakeholders that would help ease the cost of electricity to the public.
Ilagan, president of the National Association of Electricity Consumers for Reforms, Inc. (Nasecore) and a former undersecretary of the Department of Energy (DoE), wants the Chief Executive to know that power rates continue to spike and that the cheapest rates offered by two power plants run by the SMC Global Power (SMCGP) are at risk of being lost if and when their mother company opts out of their deal with Meralco due to losses.
Weeks ago, the ERC thumbed down the petition by Meralco and SMCGP to raise rates by 30 centavos/kWh as their fixed-rate agreement could not be sustained due to changes in global and local circumstances.
These circumstances include the rising cost of imported coal– if they are available– as countries like Indonesia have decided to keep supply to themselves amid the ongoing Russian invasion of Ukraine, which had also resulted in the limited supply of natural gases that power most countries in Europe.
Monalisa Dimalanta, the ERC Chair, said the agency could not act on the petitions favorably as it considers the fixed-rate power supply agreement between the two companies as a financial deal, never mind if it is also a supply agreement.
Now under fire from the public as the cost of electricity continues to skyrocket, Dimalanta went on a media blitz to justify the ERC decision.
She said it was in the best interest of the public to keep SMCGP toeing each mark of its agreement with Meralco. It’s the same public that is feeling the pinch of high prices of their food, fuel, housing cost, and yes, electricity.
Her statement is at best populist. It’s just that.
In his October 10, 2022 letter to Marcos, Ilagan distanced himself from the more politically charged (or compromised) calls from other interest groups by giving the numbers that would help the President understand the ERC’s grant of undue advantage to the other players in the industry.
Ilagan said: “On 11 May 2022, applicants (SMCGP and Meralco) filed their respective motions for Price Adjustment from the provisionally-approved generation rate of P4.045/kWh to an average of about P5.41/kWh which will be billed for the January to February 2022 billing period and for the April to May 2022 billing period. These increases represent about 32% in its rates.”
“On the basis of the ‘non-escalation’ nature of the Power Supply Agreement, on 29 September 2022, ERC denied applicants’ Joint Motions for Price Adjustment purportedly to protect MERALCO consumers from the proposed generation rate to about P5.41/kWh.”
“That is well and good, however, this does not explain why MERALCO’s average or blended rate continues to rise astronomically, reaching P6.9393/kWh in September 2022. The reason is that SPPC and SMEC (South Premiere Power Corporation and San Miguel Energy Corporation– both owned by San Miguel) are only two of 12 MERALCO suppliers with the rest continuing to charge sky-high rates without any kind of restraint…these other suppliers have “pass-thru” provisions in their PSAs which allow for automatic price adjustment/ escalation”.
Quezon Power Phil. Ltd.’s rate of P13.34/kWh, Ilagan said, is the most expensive of the rates as SPPC charged just P4.27/kWh and SMEC billed 3.74/kWh for the month of September 2022.
Power rates in Leyte and Samar are at an atrocious price of P12.86/kWh. Isabela in Region 1 had its consumers charged P9.84/kWh.
Ilagan asked the President to resolve the “anomalous situation as soon as possible”.
Before her appointment to the ERC, Dimalanta served under Aboitiz Group president and CEO Sabin Aboitiz, who was also recently appointed by Marcos as the lead of his Private Sector Advisory Council.
As Aboitiz is also a big player in the energy business, concerns were raised on his regulatory capture of the industry which also now has Raphael P. M. Lotilla serving as Department of Energy Secretary and Dennis Edward A. Dela Serna also recently taking the helm of the Power Sector Assets and Liabilities Management Corp. (PSALM) as president and CEO.
Like Dimalanta, Lotilla and Dela Serna used to be officials in Aboitiz-owned corporations.
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