The Energy Regulatory Commission on Tuesday assured a “fair and transparent” evaluation of the temporary relief filed by San Miguel Corp. and Manila Electric Co. on their 2019 power supply agreements.
“I hope that by holding this hearing en banc, with all the commissioners present and streamed online [albeit with technical challenges], we demonstrate our earnest efforts to resolve this in a fair and transparent matter,” newly-installed ERC chairperson Monalisa Dimalanta said.
Dimalanta said most of the issues were ventilated during the hearing Tuesday “and allowed the commission to get a better view of the stance of the parties and measures taken and not taken.”
SMC, through South Premiere Power Corp. and San Miguel Energy Corp., administrators of the 1,200-megawatt Ilijan natural gas and 1,200-MW Sual coal-fired power plants, filed their respective petitions for a temporary rate hike of P0.30 per kilowatt-hour over six months.
SMC asked the ERC for a fair and objective assessment of its petition in the wake of the record rise in global fuel prices driven by economic and geopolitical forces.
“We know any price increase is unpopular, and normally we never ask for one—which is what we did for all of last year when we absorbed expanding costs that we do not pass on to consumers. The war in Ukraine has taken prices far beyond what we and Meralco could have even imagined in 2019 when we signed the PSAs. At the time, the forecast for coal was only $65 per metric ton for ten years. Now it is already at $400 per MT,” SMC president Ramon Ang said earlier.
Meralco also warned that consumers would be burdened by as much as P25.8 billion if it was forced to secure new PSAs to replace those of SMC.
It said consumers might have to shoulder an additional P1.6 billion for one month if its PSAs with SMC were terminated and it was forced to source from the spot market. Alena Mae S. Flores
Meralco said in its presentation to the ERC during the hearing consumers would have to shell out an additional P12.6 billion if it would conduct a competitive selection process for a one-year replacement contract and P25.8 billion if the contract would cover until 2029.
Meralco is looking at a rate of P7.9881 per kWh under the one-year emergency procurement, higher than SMC’s rates of P6.0691 per kWh. It said a new long-term PSA would also result in P6.8959 per kWh, up from SMC’s P6.3340 per kWh. SMC’s rates already include the CIC or change in circumstances claims.