BY ONLINE BALITA NEWS
The Power for People (P4P) on Tuesday filed a motion for reconsideration before the Court of Appeals (CA) concerning the CA’s decision allowing San Miguel Corporation (SMC) to pass additional fossil fuel costs from two of its power contracts with the Manila Electric Company (MERALCO).
In July, the CA overturned an earlier order by the Energy Regulatory Commission (ERC) that denied SMC and Meralco’s rate hike and instructed two SMC power units – a coal plant in Sual, Pangasinan, and a gas power plant in Batangas – to honor their straight-priced power contracts.
The ERC order blocked SMC from forcing consumers to shoulder fossil fuel volatility costs which it committed initially to absorbing.
“We are disappointed but not surprised at how the Court of Appeals yielded to the arm-twisting of SMC so that they can hike prices and turn back on its contracts. The decision will open the floodgates to higher electricity, as SMC and other fossil fuel power generators are now emboldened to ask for more rate hikes, and to participate and win auctions through bid prices far lower than what consumers will eventually be charged knowing they can apply for and possibly secure price adjustments during their contracts’ lifetime,” said Gerry Arances, Convenor of P4P.
Atty. Luke Espiritu, legal counsel of P4P and President of Bukluran ng Manggagawang Pilipino (BMP), a member-organization of P4P, said that the CA’s move is a big blow to consumers as its decision negates the straight-pricing contracts that cushion electricity consumers from market volatility.
“All straight-price contracts, 23 by our count, are now at risk for price adjustment. We are now at the mercy of power companies who have the freedom to trick us into committing to a contract, only to back down when it is no longer profitable for them. Once again consumers are held hostage in this situation where they have no choice but to pay higher prices,” said Espiritu.
The group also referred to the recent State of the Nation Address, saying that the CA’s decision goes against President Marcos’ goal of achieving ‘competitive pricing of electricity throughout the country.’
“Taliwas itong naging desisyon ng CA na panigan ang SMC sa pangako ng Pangulo na pababain ang presyo ng kuryente sa bansa. Gatasan pa rin ang konsyumer para tuloy na pagkita ng mga malalaking kumpanya. Hinahamon namin ang Pangulo na tumindig, paningdigan ang kanyang pangako, at makisawsaw sa isyu na ito,” said Leody de Guzman, chairman of BMP.
The repercussions of the decision are already playing out, P4P said, with Meralco announcing just this week that San Miguel’s SMEC already issued its notice of termination, but that it was also San Miguel’s SPPC that offered a replacement capacity for a resulting Emergency Power Supply Agreement (EPSA).
“This is SMC ultimately hijacking power purchase bidding systems that are in place to protect consumers. We can only wonder where it pulls out its audacity to bid for the same power requirement shortage of Meralco that it itself caused. The spirit of competitive selection and least-cost electricity goes out of the window when companies like SMC are allowed to pull tricks like these,” said Arances.
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