Protest snowballs

The opposition against the power rate hike petition of San Miguel Corp. has gone international after Greenpeace joined the bandwagon to oppose the corporate giant’s energy arm SMC Global Power’s demand for an Energy Regulatory Commission relief or it cuts 1 gigawatt of electricity supply.

The international ecology activist group criticized SMC’s threat to terminate its power supply agreements with Meralco should the ERC reject their petition for a temporary rate hike.

SMC’s subsidiary claims to incur a combined P15 billion loss from its Sual, Pangasinan coal-fired power plant, and Ilijan, Batangas natural gas plant for the petition to recover P5.2 billion over six months.

Greenpeace campaigner Khevin Yu said rather than enabling a genuine shift to clean energy, the company has resolved to pass the burden of these costs onto electric consumers.

It called on the ERC to remain firm in guarding the welfare of consumers, “by ensuring that electricity prices will not drastically increase to compensate for dirty, destructive, and expensive energy generation.

On its anniversary, consumer groups also trooped to SMC’s headquarters to register their protest against the looming increase in monthly bills.

The groups which are under the Power for People Coalition said they can’t reconcile SMC’s claim of losses from unexpected increases in the price of gas while aggressively pushing for more gas projects amounting to 12.3 gigawatts through eight power plants in addition to the 1.8-gigawatt plant already under construction.

SMC Global Corp, according to the consumers’ representatives, should bear the cost of a bad business decision instead of passing it on to consumers.

They said the Energy firm knew the risks of getting into the PSAs but it preferred to bid too low to corner the Meralco contracts.

Its threat to the ERC to withdraw from the supply contracts if the rate hike petitions are denied goes against the spirit of the competitive selection process which is a mechanism to ensure the least cost of services to consumers.

Another valid point raised is the likelihood that other generation companies with similar PSAs will run to the ERC for “equitable” treatment for rate increases.

There are about two other companies, ACEN and First Gen, which have similar contracts with Meralco but they have not petitioned for rate relief.

P4P said that SMC Global Power had failed to present proof for its claimed losses.

An energy stakeholder said that other power companies that had the good sense to spot the risks in the PSA either dropped out from the competitive selection process or submitted prices that were more grounded on reality, inevitably losing out to SMC.

The pass-through provision penalizes Filipino consumers which is unconscionable considering the backlash of the pandemic.

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