‘SMC reneging on energy contract for new deal’
Consumer group Power for People Coalition fears that the SMC unit only wanted to get out of its current contract to shift to a two-step pricing.
Business titan San Miguel Corp.'s energy arm SMC Global Power wanted to get out of the straight pricing scheme that compels it to stick to a fixed amount in its power supply agreement with distributor Manila Electric Co.
Consumer groups are blasting away at SMC for informing participants in an ongoing public hearing that it intends to unilaterally terminate power supply agreements with Meralco.
SMC Global Power has pending petitions with Energy Regulatory Commission to collect an additional P4 per kilowatt hour for the Sual coal plant under the San Miguel Energy Corp. and an additional P0.80 per kWh for the Ilijan natural gas facility of its unit South Premiere Power Corp.
The proposal, however, would need the amendment of the provisions of the PSA which can only happen under a "change-in-circumstances" provision or when an unpredictable event happens.
In its petition with ERC, SMC wanted to recover P5.2 billion from electricity consumers within six months which it claimed was necessary so it could continue sourcing fuel and fulfill its power supply contract with Meralco.
SMC wanted to amend its tariff and collect an additional P4 per kWh for the Sual coal plant and an additional P0.80 per kWh for the Ilijan natural gas facility.
The PSA is the product of a competitive selection process that the government requires to ensure the lease cost of electricity.
Consumer group Power for People Coalition fears that the SMC unit only wanted to get out of its current contract to shift to a two-step pricing that provides for adjustments in pricing and then passes on the extra amount to consumers.
Talks in ERC are that after SMC Global Power abrogates its PSA a new auction will be held by Meralco for a substitute PSA which SMC Global Power will rejoin.
Consumers wanted Meralco to blacklist SMC Global Power from any future PS bid.
"Likely that would be the result (if SMC Global Power backs out of its PSA). So ERC and Meralco should defend (straight pricing) for their customers or consumers," P4P convenor Gerry Arances said.