‘Blacklist SMC from bid’
Consumer groups have appealed to the Energy Regulatory Commission to intervene and halt SMC Global Corp.’s unilateral action
Behemoth San Miguel Corp.'s energy units should be blacklisted from participating in new power supply agreements with dominant supplier Manila Electric Co. once it unilaterally rescinds its existing deal.
SMC subsidiary San Miguel Global Power had issued a notice of termination with Manila Electric Co. to end its PSA on 3 October as a result of what it claims as mounting losses due to the escalated fuel prices and the unpredictable natural gas supply from the Malampaya field.
Consumer groups have appealed to the Energy Regulatory Commission to intervene and halt SMC Global Corp.'s unilateral action until it shows proof of the P15 billion operation losses that it cited in its rate hike petition.
Nonetheless, groups under the Power for People Coalition said that if SMC Global Power pushes through with its PSA withdrawal, it should be excluded from any future bids.
ERC can make a ruling that SMC is an unreliable party in a contract. "ERC can question the reliability of SMC in entering into a PSA," Arances indicated.
"Meralco should act on it independently to protect the welfare of electricity users," Arances averred.
Based on the prices solicited for the PSA, Arances revealed that SMC was included, which he said is absurd since it had backed out of the deal.
Termination nears
SMC has notified ERC that it will end the PSA but consumer groups wanted the regulator to first compel SMC Global Power to show proof for its claim of losses.
Withdrawal of the PSA would mean higher costs of electricity since Meralco will have to secure the huge shortfall from the Wholesale Electricity Spot Market which sells at higher prices than the contracted amounts.
"Second, SMC Global Power was referring to 'the change of circumstances regarding the natural gas supply from Malampaya which is inconceivable since the status of Malampaya's reserves is widely known," P4P Convenor Gerry Arrances said.
"The loss in the definition of SMC is a reduction in profit after it reported a P17 billion net income last year," Arances said. "That is pure greed."