Government should investigate the practice of contractors bidding low, even on private deals, to seal long-term projects before turning around and running to regulatory agencies to have their rates adjusted.

Consumer groups said the artificially low offers to defeat the purpose of auctions.

In the energy sector, such practices negate the aim of the competitive selection process to provide electricity users with the lowest-priced electricity.

Umbrella group Power for People Coalition said the petitions of SMC Global Power units South Premiere Power Corporation and San Miguel Energy Corporation have submitted a P4.30 per kilowatt hour to seal the PSAs.

Yet, it filed last year petitions for adjustments in the terms of its PSAs that violated its nature of straight pricing.

SMC Global Power cited a "change in circumstance" provision in its PSAs to back its petition with ERC.

Center for Energy, Ecology and Development, a private think tank, released figures showing that based on the SMC petitions for SMEC's Sual coal and SPPC's Ilijan natural gas plants, consumers will be shelling out P33.76 to as much as P168.80 per month more on their electric bills.

For an average consumption of 200 kilowatt-hours, an additional P67.52 is expected on electricity bills or P48 for coal charges and P19.52 in gas costs.

Consumer groups called the SMC Global Power maneuver to obtain the PSAs by resorting to "promo price."

"We should investigate SMC for this pricing scheme, where you have (SMC president Ramon) Ang himself admitting they priced it very low to be competitive," P4P Coalition convenor Gerry Arances said.

A former official whom Daily Tribune talked to said the practice of flooring their offers to obtain a contract happens not only in the power sector.

Arm-twisting gov't

The contractors thereafter rely on the government to compel consumers to shoulder their added expenses and make good on their profit.