The National Association of Electricity Consumers for Reforms Inc. asked the Marcos administration to look into the contracts of Manila Electric Co.’s other power suppliers.
Nasecore president Pete Ilagan said in a letter to President Ferdinand Marcos Jr. the Energy Regulatory Commission denied the motions of Meralco and San Miguel Corp.’s subsidiaries for a price adjustment under their contract.
Ilagan said the parties sought approval to adjust their provisionally-approved rate of P4.045 per kilowatt-hour to an average of P5.41 per kWh, representing a 32-percent increase.
He said the ERC denied the motions based on the “non-escalation nature” of the PSA and “purportedly to protect consumers from the proposed generation rate adjustment of about P5.41 per kWh.
Ilagan said while the move is “well and good”, it does not explain why Meralco’s average or blended rates reached P6.9393 per KWh in September.
“The reason is SPPC [South Premiere Power Corp.] and SMEC [San Miguel Energy Corp.] are only two of the 12 Meralco suppliers, with the rest continuing to charge sky-high rates without any kind of restraint,” he said.
Ilagan said these other suppliers have pass-through provisions in their PSAs that allow for automatic price adjustments/escalation.
He said Quezon Power Phil. Ltd. charges the highest rate at P13.34 per kWh, or more than double what SPPC and SMEC are charging. He said that in September, SMEC and SPPC were the second to third suppliers with the least cost supply at P3.74 per kWh and P4.27 per kWh.
“If the consumers can be afforded reliefs on the proposed price adjustments, public interest dictates that these other suppliers taking advantage of the pass-thru provision must be reined in as well by the ERC,” he said.
Ilagan said the regulator also failed to consider the generation rates of electric cooperatives, which went up to as high as P12.86 per kWh.
“Ironically, ERC reined in the two power generators with the slightest increase in generation charges but tolerated the higher rate of the other Meralclo suppliers and the runaway charges of most electric cooperatives,” Ilagan said.
He said this is the opposite of applying the “least cost principle” under the Electric Power Industry Reform Act and does not serve the public interest.
“As it is, consumers are saddled with ERC-approved PSAs that allow outrageous increases in the generation charge but disallow supply in the least cost manner,” Ilagan said.