Oligarchs clawing back (2)

When San Miguel Corp. unit South Premiere Power Corporation participated in the bid for the Independent Power Producer Administrator agreement for the 1,200-megawatt Ilijan natural gas plant, it submitted an offer that it apparently can’t honor later, particularly on the pricing of electricity that would be the basis of the remittance to the government.

State holding firm Power Sector Assets and Liabilities Management did not agree with the SMC unit’s unilateral revision of the deal, and debt started to pile up. SPPC now has more than P24 billion in payables.

President Rodrigo Duterte called out the disadvantageous deal in an address in a strong speech. SMC, later on, paid P6 billion supposedly under quiet protest but now the debt continued to build up.

SMC Global Power’s remedy is to seek an adjustment in the power charges that would add as much as P33.76 to P168.80 a month to household bills.

It claims to have lost P15 billion from 2021 until the first half of the year due to the operations of San Miguel Energy Corporation’s Sual coal plant and SPPC’s gas plant. Despite its claimed losses, it has reported a total net income of P17.9 billion in the first quarter compared to a year ago, while its parent SMC reported a net income of P80.7 billion in the first half of the year.

Based on a report of the think-tank Center for Energy, Ecology and Development, ERC granting SMC’s motion for price adjustment would mean an average household that consumes 200 kilowatt-hours of electricity would have to pay an additional P67.52 on their monthly bills broken down to P48 in additional charges for SMEC and P19.52 for SPPC gas charges. Coal charges can go up to as high as P120 and gas with P48.80 as a result of SMC’s petition.

Added burden to consumers

Consumer groups warned that the added household costs will increase the burden on the already suffering public.

They pointed out the danger of opening the floodgates to similar claims since there are four independent power producers or power plant operators who are in the same boat as SMC Global Power.

(To be continued)

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