ERC urged to reject Meralco deals with 7 coal firms

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Members of civil society and representatives of consumers and coal-affected communities marched to the Energy Regulatory Commission (ERC) office in Pasig on Wednesday to file petitions for intervention regarding the country’s largest power distribution utility Manila Electric Co. (Meralco’s) application for power supply agreements (PSAs) with seven coal-fired power plants across the country.

The Center for Energy, Ecology, and Development (CEED), along with Sanlakas, Philippine Movement for Climate Justice (PMCJ), Freedom from Debt Coalition (FDC), Koalisying Pabahay ng Pilipinas (KPP) and other member organizations of the Power for People (P4P) filed separate petitions questioning various irregularities concerning the process of application, as well as negative consequences which would arise if Meralco’s application is granted.

“The approval of Meralco’s PSAs would lead to 3,551-megawatt (MW) of coal entering the pipeline, which would pose great harm to the people’s health and livelihood, as well as the environment and the climate,” CEED Convenor Gerry Arances said in a statement.

“But on top of this, Filipinos will end up paying more for electricity if Meralco would have their way,” he added.
Arances explained that the PSAs will lock the country into a reliance on coal for the next 20 years, which means that regardless of the trend of decreasing costs for renewable energy technology like solar and wind, the Philippines will be stuck with operating and paying for costlier and dirtier energy from coal.


“Despite the passage of the Renewable Energy Act of 2008, renewable energy’s share in the power mix has not increased from 34 percent in that year. In fact, it has even decreased to 29 percent as of 2016,” Arances said.
“About 70 percent of power projects to go online in 2019 will be from coal. This means that by 2021, coal will supply at least 50 percent of our energy needs,” he added.

On April 29, 2016, Meralco filed separate applications for approval of separate PSAs with the following power generation companies: Redondo Peninsula Energy, Inc. (RPE) with 225-MW, Atimonan One Energy, Inc. (A1E) 1,200-MW, St. Raphael Power Generation Corp. (SRPGC) 400-MW, Central Luzon Premiere Power Corp. (CLPPC) 528-MW, Mariveles Power Generation Corp. (MPGC) 528-MW, Panay Energy Devt. Corp. (PEDC) 70-MW, and Global Luzon Energy Devt. Corp. (GLEDC) 600-MW,

Butch Junia of the FDC, who filed a petition for intervention regarding the PSAs last June 13, pointed out that Meralco’s midnight contracts should be subjected to the competitive selection process (CSP) in order to ascertain if “it is the best and least cost supply for consumers.”

“Conveniently for Meralco, ERC had previously reset the CSP’s effectivity date last year from Nov 6, 2015 to April 30, 2016. This would exempt the PSAs from undergoing the transparent and public bidding ordained in the CSP,” Junia said.

“Even with this, Meralco’s PSA applications were still late, as it was filed after office hours of April 29 2016, which was a Friday and the last business day of April. Thus, ERC must follow its own rules and throw out the midnight contracts so that a transparent and public bidding may take place,” he added.

Aaron Pedrosa of Sanlakas blasted Meralco for its shady dealings, saying that its purchase of power from the generation companies are “incestuous,” given that it has vast shares in all seven companies. “With its investments ranging from 14 percent in PEDC, to 49 percent of MPGC, and even 50 percent of SRPGC, Meralco would have even greater influence in setting the price of electricity and ensuring maximum profit for its investors.”
“This is not only reflective of the failure of the EPIRA [Electric Power Industry Reform Act of 2001] to prevent market influence by big electricity oligarchs, but also contradicts the promise of decreasing the price of electricity for citizens,” Pedrosa stressed.

“We now challenge the ERC to consider the interests of us [consumers]who would shoulder the burden of these shady dealings and throw out Meralco’s midnight contracts,” Pedrosa said.

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