Solidarity vs greed

Consumers are caught in the crossfire of the San Miguel Corp. power price imbroglio after the Asian conglomerate pointed a loaded gun at the regulator to force an approval.

The conglomerate's energy arm SMC Global Power has threatened to walk from its power supply agreement with Meralco if it fails to get the Energy Regulatory Commission's nod on its rate hike petitions.

With ERC are two SMC Global Power petitions for a "temporary" rate increase of 80 centavos per kilowatt-hour from P4.30 to P5.10/kWh charge for 670 megawatts of baseload capacity from the Ilijan natural plant, and an average of P4/kWh from P4.30 to P8.30/kWh for 330 MW, also for baseload from the Sual coal plant.

SMC Global Power invoked the change in circumstance provision in its PSA, saying that the spike in coal prices and the dwindling supply from the Malampaya natural gas field were unforeseen events.

Consumer groups, however, opposed the contentions of the SMC unit, saying it should have known better when it submitted its too low offer to corner the Meralco PSAs.

SMC Global Power now wants terms in the contracts it won changed by arm-twisting the ERC into approving its price hike petitions.

The petition places ERC in a bind as other groups, which have similar PSAs as that of SMC Global Power, said they expect the same treatment when the regulator hands down its decision.

The prospect thus is that consumers suffer beyond the price increases that can be inflicted on them by the SMC petitions.

Ruling in favor of the twin petitions will open the floodgates to similar claims, since Meralco has four independent power producers, which can cite the same change in circumstances to petition for temporary tariff adjustments.

The Ayala unit ACEN, which has a similar deal with Meralco, demands a level field.

"We hope that our regulator, as well as Meralco, will treat all suppliers fairly and consistently," ACEN president and chief executive officer Eric Francia said.

If there is a change in circumstances in one supplier, the same should apply to others, since we have the same contract and similar set of circumstances, he added.

ACEN and First Gen of the Lopez Group have not taken the recourse of a price increase and seem to have absorbed the same backlash from higher global fuel prices and the effects of the Eastern European conflict, unlike SMC which wants consumers to foot the bill.

The two energy companies have honored the provisions of their contracts based on straight pricing that does not allow adjustments as a result of shifts in global costs.

It all boils down to corporate priority between unbridled greed for profit and solidarity with consumers who have yet to rise from the hardships caused by the pandemic.