Daily TribuneThe group pointed out that the contracts allow the plants to automatically pass on fuel costs to consumers, which is against the “least-cost” provision of the Electric Power Industry Reform Act.
(File Photo)
AFP
Consumer advocacy groups are asking the power industry regulator to look into distribution utilities entering into power supply agreements (PSA) utilizing fossil fuels.
In a statement on Tuesday, the Power for People Coalition (P4P) warned that deals using conventional fuel pose a risk of translating to more expensive electricity for consumers.
To protect consumers from imminent bill shock, P4P said it filed a petition before the Energy Regulatory Commission (ERC) to investigate the country's largest distribution utility for initiating a bidding process that awarded contracts covering about 3 gigawatts (GW) to fossil fuel plants.
“The terms of these power contracts are unfavorable to consumers and small businesses. Everyone loses except big power players who are leaving consumers no choice but to pay for more expensive electricity while their profits are soaring,” P4P Convenor Gerry Arances said.
“We are asking the ERC to reject these contracts as part of their responsibility of protecting the public,” he added.
The group pointed out that the contracts allow the plants to automatically pass on fuel costs to consumers, which is against the “least-cost” provision of the Electric Power Industry Reform Act (EPIRA).
If contracts get approved, consumers will be locked into 15 more years of high power prices, it added.
Responding to the group's claims, Meralco assured customers that it only sources the least-cost available supply through, among others, the conduct of "a transparent" competitive selection process (CSP).
“We strictly observe and follow the requirements and standards set by the government,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said.
Meralco recently awarded a 1,200-MW baseload PSA to South Premiere Power Corp. after it submitted the lowest bid of P7.0718 per kWh and a 1,800 MW to GNPower Dinginin Co. Ltd., Mariveles Power Generation Corporation, and Excellent Energy Resources Inc.
Currently, the local power industry is governed by the Electric Power Industry Reform Act, or EPIRA passed during the time of former President Gloria Macapagal Arroyo.
The EPIRA requires that the restructured electricity industry is assured of healthy competition through a level playing field in the competitive retail electricity markets, with oversight by the ERC and the Philippine Competition Commission.
The law also guarantees consumer choice and penalizes abuse of market power.
