Press Release | September 15, 2022
The Power for People Coalition (P4P) on Thursday trooped to the Manila Electric Company (Meralco) office in Pasig City demanding that the distribution utility back off from its collusion with San Miguel Corporation (SMC) in the latter’s motions for a price adjustment pass on its alleged ₱5 billion losses to consumers amid skyrocketing gas and coal prices.
SMC filed motions for price adjustment before the Energy Regulatory Commission (ERC), seeking to reverse its contractual obligation to provide electricity at a straight price and instead pass on its losses in the fossil fuel market to consumers.
“Any company would go to great lengths to protect the interests of its patrons, on whom their profits depend. Meralco, meanwhile, is willingly handing over consumers for SMC to blackmail higher charges out of them,” said Gerry Arances, P4P Convenor.
P4P has long argued against the increase in prices, saying that the motions of SMC make a mockery of the public bidding process of power supply agreements (PSAs) by allowing generation companies to change approved prices anytime their profits are threatened.
Gas prices have increased by almost 112% since last year and coal by 150%. According to the group, SMC should own up to its business decision of placing its bet on these fuels despite their volatile nature.
“Pinagpilitan ng SMC na coal at gas ang gamitin, kahit na pataas nang pataas ang presyo ng mga ito sa merkado. Bakit konsyumer ngayon ang gigipitin para mabawi ang nalugi sa kanila? Walang katarungan ito sa manggagawang halos mapatid na ang sinturon sa paghihigpit sa katiting na sahod,” said Leody De Guzman, chairperson of Bukluran ng Manggagawang Pilipino (BMP).
Electricity prices are rising all over the country as distribution utilities pass on the high cost of coal and gas to their consumers. Meralco’s rate increase has so far been tempered to “straight price” provisions of some of its PSAs, which SMC is now seeking to overturn.
“Straight pricing works to protect consumers. It gives a predictable rate for the duration of the contract. Having it in place is one of a few things Meralco has done right by consumers in its procurement processes. Meralco’s responsibility is to protect its clients with the terms of its PSAs, not the profit of its supplier,” said Arances.
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