Raw deal for power consumers

PSA reviews will cut consumers free from corporate gluttons that have proliferated as economic activity picks up.

Instead of a revision as SMC Global Power has petitioned, consumer groups are asking the Energy Regulatory Commission to impose its authority and review all power supply agreements between electricity producers and distributors.

Under the provisions of the Electric Power Industry Reform Act, the PSAs goal is to provide the least cost of electricity to consumers, which ERC has the mandate of ensuring that it is complied with.

The ERC is expected to soon decide on the petitions for rate adjustments of SMC Global Power units South Premiere Power Corp. and San Miguel Energy Corp.

SPPC, which runs the Ilijan natural gas plant, wanted a “temporary” 80 centavos per kilowatt-hour increase in the fixed PSA rate, while SMEC is seeking an atrocious P4/kWh increase in its Sual coal plant rate.

San Miguel Global Power wanted to pass on P5.2 billion of its losses from high coal prices and the supply restrictions from the Malampaya natural gas field.

Consumers’ umbrella group Power for People coalition wanted all PSAs that did not undergo competitive selection processes and those charging “exorbitant power rates” despite the competitive selection process to undergo ERC review.

Particularly mentioned was that of SMC’s petitions, despite the bidding process being long done, that was supposedly meant to recover P15 billion in losses.

“SMC’s move to trap the Filipino consumers to shoulder its operating costs in the face of inflation is the height of unfairness,” P4P convenor Gerry Arances said.

He added that SMC can and should shoulder business risks that it is more capable of mitigating compared to ordinary consumers. “This persistent attempt of SMC to earn from the misery of Filipinos should not even be entertained,” Arances said.

Even House Energy panel vice chairperson Rodante Marcoleta had denounced ERC for accepting a petition to change PSA terms “knowing that the contract is fixed.”

Marcoleta did not mention SMC, but it was obvious that he was referring to the Asian business kingpin.

As the economy rushes toward recouping the opportunities lost during the pandemic, power rates have been noticed to be on the uptrend.

Complaints about increasing power rates were filed by consumers in the provinces of Oriental Mindoro, Nueva Ecija, Northern Samar, Pampanga, Batangas, Negros, Quezon Province, South Cotabato,
Maguindanao, Laguna, Zamboanga, Pangasinan, Tarlac, Marinduque, Camarines Norte, Isabela, Masbate, Aurora, Bicol, Southern Leyte, and Davao Oriental, according to Senate Resolution 107.

The resolution was the subject of a recent Senate Energy Committee hearing, where the SMC petition for an adjustment in its fixed PSA rate was on the main agenda.

During the hearing, Southern Leyte Electric Cooperative was identified as charging the highest residential rates among electric cooperatives at P19/kWh in July 2022, followed by Albay Power and Energy Corporation charging P18.0369/kWh in August 2022.

PSA reviews will cut consumers free from corporate gluttons that have proliferated as economic activity picks up.


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