“The Meralco–SMC partnership exemplifies how corporate interests can override public welfare“
TWO corporate giants, Meralco and San Miguel Corporation (SMC), have entered into a partnership that benefits them but could harm Filipino consumers. What began as a “strategic alliance” has evolved into a deeper relationship that appears to undermine laws, renewable energy goals, and public trust.
Meralco recently awarded a power supply agreement to Sual Power Inc., a coal-fired plant owned by SMC.
This decision blatantly disregards legal requirements and government policy. Republic Act 12146, which extended Meralco’s franchise in April 2025, mandates prioritization of renewable energy sources.
While coal contracts are not outright banned, the law requires Meralco to promote RE through transparent, competitive processes. The PSA with Sual mocks this mandate, undermining efforts to transition toward clean energy.
President Marcos Jr. renewed Meralco’s franchise partly to align with his administration’s energy policy: a transition to RE as a cornerstone of sustainability and economic growth.
The Department of Energy has set clear targets—35 percent RE share in the power mix by 2030 and 50 percent by 2040. Meralco’s coal deal runs counter to these goals, threatening progress toward energy security and affordability.
The deal raises serious conflict-of-interest concerns.
Records show SMC acquired a 3.8 percent stake in Meralco in July 2025, just months before the PSA award.
Earlier, in January 2025, Meralco PowerGen Corporation (MGen) partnered with SMC’s San Miguel Global Power Holdings (SMGP) and Aboitiz Power to develop a liquefied natural gas (LNG) facility in Batangas.
This partnership created a complex web of ownership through Chromite Gas Holdings Inc. (CGHI), which holds stakes in SMC subsidiaries operating major power plants, including Ilijan and Excellent Energy Resources.
SMGP retains significant equity in these ventures, reinforcing the appearance of intertwined commercial interests.
Such linkages compromise procurement integrity, as Meralco’s decisions may favor affiliates rather than consumers. Awarding a coal PSA under these circumstances erodes public trust and raises suspicions of favoritism and regulatory capture.
Meralco’s bid documents for the 200-megawatt contract specified renewable energy capacity. Yet, the contract language allowed bidders to deliver power from other facilities, regardless of source.
This loophole enabled Sual, a coal plant, to secure the deal. The ambiguity undermines the franchise mandate and perpetuates fossil fuel dependence, despite the government’s push for accelerated RE deployment.
The implications are severe. The Philippines already suffers from some of the world’s highest electricity costs.
By favoring coal and sidelining renewables, Meralco risks locking consumers into expensive, dirty energy.
The deal not only contradicts national policy but also deepens reliance on fossil fuels, delaying the transition to sustainable alternatives.
Meralco’s actions reveal a disregard for consumer welfare. Its alliance with SMC prioritizes corporate gain over public interest, producing “dirty power” and contempt for Filipino households struggling with high bills.
The 200-megawatt contract is no small matter—it represents a significant portion of supply that could have been allocated to renewable producers.
The DOE and the Energy Regulatory Commission must urgently review the PSA. Corrective measures are needed to protect the integrity of the power sector and ensure compliance with RE mandates.
Without intervention, Meralco’s coal deal sets a dangerous precedent, reducing renewable compliance to a mere paper exercise and undermining national energy goals.
The Meralco–SMC partnership exemplifies how corporate interests can override public welfare.
By awarding a coal PSA despite legal and policy obligations to prioritize renewables, Meralco undermines the government’s energy transition strategy.
The alliance raises conflict-of-interest concerns, distorts market outcomes, and burdens consumers with high electricity costs.
The pressing question remains: who will stop this? For now, Meralco continues to act with impunity because it certainly can. (Email: ernhil@yahoo.com)
