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MKP: power crisis a repeat of 2013 unprecedented rate hike

Murang Kuryente Partylist (MKP) on Monday warned the public that the power crisis being felt now may result to the same scenario in 2013 when power distribution giant Manila Electric Company (Meralco) was allowed to push for the highest power rate hike in the country’s history.

MKP nominee and longtime energy advocate Gerry Arances said that since 2013, nothing really changed on how the government regulates power companies and that existing policies and the way they are implemented still allow both the generation companies (gencos) and distribution utilities (DUs) to play the energy sector and create an artificial power crisis.

“It’s time for the government to be more stringent on approving power supply agreements (PSAs). PSAs should be honest, straightforward, and must prioritize the welfare of Filipino consumers over profits,” said Arances.

“The most concrete way to be more stringent with future and pending PSAs is to ensure that generation companies are penalized for unplanned outages. Furthermore, all costs associated with unplanned outages must be borne by the generation companies and not consumers,” he added.

A series of power interruption hounded some parts of Metro Manila and nearby areas last week as several power plants simultaneously shutdown.

Right now, Luzon grid is still short of 1,367 megawatts (MW) as four* coal power plants are still on forced outage, namely SMC Consolidated Power Corporation Limay Unit 2 (150 MW), TeaM Energy Corporation Sual Unit 1 (647 MW), Southwest Luzon Power Generation Corporation Unit 2, and Pagbilao Energy Corporation Unit 3 (420 MW).

Arances said, “My biggest worry is that the power sector players are trying to repeat what happened in 2013.”

In 2013, the issue on Meralco’s request to implement the highest power rate hike in the Philippine history, which the Energy Regulatory Commission (ERC) initially approved, blew up when from an initial estimate of up to P2.5 per kilowatt hour (kwh) increase, Meralco wanted its consumers to pay a P4.15 per kwh hike over a three-month period.

Meralco blamed this on the scheduled maintenance shutdown of the Malampaya natural gas platform, which triggered the company to get the bulk of its supply from the Wholesale Electricity Market (WESM).

Meralco gets a portion of its power supply from Malampaya through a PSA with the Malampaya consortium, or the power plant operators that source their fuel from the Malampaya gas project, which supplies to as much as 40 percent of gas-fired power plants in Luzon.

The ERC’s decision on what could have been the highest power rate hike in Philippine history was stopped by a Temporary Restraining Order (TRO) issued by Supreme Court, citing a possible collusion between gencos and DUs that allowed them to ask for such rates.

“If it were allowed, it would have translated to billions in profits for Meralco,” Arances said. “The problem now is that issue has not been resolved yet and nobody was made accountable. So long as the system doesn’t change, energy companies can always try again and there will be no penalties, except for consumers.”

 Concerning the Department of Energy’s announcement that it will review the cost impact of replacement power procurement as provided in PSAs, Arances said this was not enough.

 “What is the point of reviewing these things if there is no system to punish those who would be found to have exploited the Filipino consumer? I am alarmed that until now, the government is reluctant to take on these power companies head on,” he said. (PR)

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