Consumer groups’ fears that other generating companies would follow the lead of San Miguel Corp.’s unit, San Miguel Global Power (SMGP), in invoking the broad “change in circumstances” (CIC) clause to seek rate adjustments have now been realized.

SMGP argued that rising fuel prices due to geopolitical events and the high cost of coal warranted temporary price adjustments, despite two of its major power plant operators holding straight-pricing contracts that do not allow billing increases.

SMGP argued that rising fuel prices warranted price adjustments. ERC said fixed-price contracts inherently carry that risk and should have been known to bidders for the deal.

ERC recently approved P31.34 billion in fossil fuel charges to be passed on to consumers.

Coal- and gas-fired power plants owned by SMGP and other groups applied for motions seeking to “recover” supposed losses from the “extraordinary surge in fuel costs” triggered by Indonesia’s coal export ban in 2021 and Russia’s invasion of Ukraine in 2022.

“Fossil fuel prices are volatile — that’s a fact shown by history. Their predictable unpredictability is no ‘change in circumstance.’ Despite that, corporations keep betting on coal and gas because authorities like ERC fuel their audacity to pass higher costs onto consumers,” consumer group Power for People Coalition (P4P) argued to Nosy Tarsee.

Advocates for cheap, readily available electricity said power producers should be solely responsible for bearing the financial consequences of their business decisions, not penalizing consumers.

ERC betrayed consumers by making them pay for trouble they had no hand in creating.

The consumer group sought accountability for abuses in the power sector that keep electricity prices high, including collusion, corruption, and violations by players and authorities.

That the ERC allowed the P31 billion to be shouldered by consumers is indicative of the energy regulator’s bias toward corporations, sidelining public interests.

Overcharging and passed-on costs, contracts entered into despite terms detrimental to consumers, unmet contractual obligations, and price plays, such have been the hallmark of the dominant power producer in its efforts to game the system.