Groups battling the petition of San Miguel Corp.’s energy arm SMC Global Power for rate increases accused the conglomerate of obfuscation or gaslighting to obtain public support.
The Energy Regulatory Commission last Monday dismissed the petition of SMC Global Power in a 3-2 decision as the regulator essentially said straight pricing in the power supply agreements does not allow rate increases.
SMC Global Power petitioned for its units, South Premiere Power Corp. which operates the Ilijan natural gas plant, and San Miguel Energy Corp. which runs the Sual coal plant, a total of P4.80 per kilowatt-hour in “temporary” increases covering five months.
SMC Global Power wanted to recover P5 billion in losses from higher coal costs and supply restrictions from the Malampaya natural gas plant.
It previously threatened to terminate its PSAs with Meralco if it failed to obtain the ERC’s nod but it backtracked and later said it will keep the contracts but will pursue legal remedies available to it.
Civic organizations outlined the likely steps that can be taken to uphold the welfare of consumers, starting with not allowing SMC to terminate the PSA.
“The ERC said PSAs are not ordinary commercial contracts, there is public interest (involved) in these contracts,” according to the Consumer Coalition Power for People.
“The law allows Meralco to seek damages from SMC. Sue SMC to force it to perform according to the PSA or have SMC comply with the six-month notice period before any termination of PSAs,” P4P convenor Gerry Arances indicated.
“And if that happens, Meralco can blacklist SMC,” the P4P head said.
Very real consequences should be applied to companies that only seek to profit from the energy industry and ignore the public welfare aspect of the service, Arances added.
The consumer group added that should SMC insist on terminating the PSAs in question, then Meralco should look at renewable energy to take up the shortfall.
P4P also took exception to SMC’s claim in a statement that the petition was the only way to save straight price contracts.
Arances said SMC is out to undermine the ERC decision. “That is their tact,” he added.
The consumer groups found hilarious SMC’s claim that “changing the price on straight price contracts is the way to save straight price contracts.”
“It’s like saying the only way to reduce the number of thieves is to make it legal for them to be thieves,” according to Arances.
“We note, however, that SMC itself has said that straight price contracts are pro-consumer and kept prices low. It should be noted to ensure that all PSAs from this point forward are straight price contracts,” he added.
Bad spin
P4P also blasted SMC for claiming that the generation company’s motions to hike power rates would have best served the interests of consumers as “gaslighting and outright fabrication.”
Gaslighting happens when the subject of an accusation attempts to sow self-doubt and confusion to gain power and control by distorting reality and forcing the accuser to question his judgment.
SMC released a statement a day after ERC’s 3-2 decision denying the SMC Global Power petition.
SMC, in its petition, is seeking to escape its obligation to provide electricity at a straight, or fixed, price to consumers under a 2019 PSA.
“SMC’s motions are anti-consumer and baseless. They have not submitted any proof they have lost as much as they claim, nor have they proven why consumers must lose and they can’t,” Arances pointed out.
“The ERC itself said that the figures presented by SMC during the clarificatory hearing are different from what they have been feeding the public,” Arances explained.
No ordinary deal
The consumer advocacy group also said there is no reason for Meralco to look for an emergency power supply agreement, as the distribution utility announced earlier this week.
“SMC entered into a contract with Meralco through the PSA which is not an ordinary contract, but one that is imbued with public interest, something the ERC itself has said,” consumer activist Luke Espiritu, who is also a counsel for the group, said.
“With Meralco seeking emergency PSAs, it is invalidating the consumers’ victory in the ERC decision and allowing SMC to go scot-free by evading its obligations,” Espiritu alleged.
“Besides, SMC, in its statement, has not repeated its threat of withholding supply from consumers,” he added.
“Although SMC did say they will invest more in transitioning to cleaner energy, we don’t know what they would consider ‘cleaner.’ But we do know that renewable energy is clean — cleaner than any other energy,” P4P pointed out.
It added Meralco should if it needs more power, look to clean and sustainable energy as the source. They’re affordable, reliable, and sustainable — a true win for consumers. Let’s turn off the gaslighting and replace them with more renewable energy projects,” Arances said.