Congress should use its oversight power and urge the Department of Energy to make changes in the competitive selection process to level the playing field for renewable energy by mandating the straight pricing method.

The power supply agreements that San Miguel Corp. energy arm SMC Global Power wanted to free itself from, the use of the straight pricing method that has stringent requirements on passing on costs to consumers.

"The pass-on provision in the two-step pricing method involves volatile fossil fuel cost which is not a consideration in renewable energy sources that uses the straight pricing method," Power for People Coalition convenor Gerry Arances said.

The provision allowing higher costs to be passed on to consumers, in essence, already defeats the purpose of the Electricity Power Industry Reform Act to provide the least cost to consumers.

SMC Global Power claimed losses of P15 billion and it wanted a revision of the price it offered to win the PSA with Meralco claiming that fuel prices particularly coal have skyrocketed.

"That's their risk that they basically decided on in making the low offer but it is up for the government and Congress to rectify the high cost of electricity because of the current situation of high prices," P4P added.

Arances said that the regime of high inflation should be a wake-up call to stakeholders about the need for sustainable and cheaper sources of electricity.

Sky-high electricity costs

"Sky-high electricity costs hurt Filipino families' hope of bouncing back. But we are not surprised by the heights power rates are reaching: It is the outcome of a decade of recklessly building dependence on fossil fuels for our power needs," Arances indicated.

He added that the situation was worsened by the neglect of "actors supposedly protecting consumers' interests to allow companies to rake in profits," Arances said.

P4P released data showing electricity prices reached as high as P19 per kilowatt hour in Leyte last July, P16.77/kWh in Ilocos Norte, and P16.12/kWh in Ilocos Sur.