ERC must not submit to Meralco in the approval of anomalous power supply deals


June 6, 2017


Scientist activist group AGHAM - Advocates of Science and Technology for the People hit electricity distribution giant Meralco for its impudence after the company imposed pressure on the Energy Regulatory Commission (ERC) to immediately approve anomalous power supply agreements (PSA) between Meralco and seven affiliated generation companies.

“Meralco’s warning that delays in the implementation of the PSAs would result to higher project costs is an overt threat to the public and the government. The ERC must not succumb to this pressure. Instead, it must side with the public and junk these anomalous deals,” said Finesa Cosico, Secretary-General of AGHAM. 

In a statement dated May 31, Meralco urged the ERC to immediately decide on its pending power supply applications, warning that the delays can cause electricity rates to surge up due to increased project costs. MERALCO cited seven PSAs still pending ERC approval. All seven companies are Meralco’s sister companies.

The group noted that these PSAs were agreed upon under dubious circumstances. It was signed just days before the Competitive Selection Process (CSP) rule took effect on April 30, 2016, which ERC mysteriously moved from the original date on November 6, 2015, allowing Meralco to enter into the agreements.

“Both the ERC and Meralco must be held accountable. ERC must be questioned why it moved the schedule and allowed Meralco to enter into PSAs without undergoing CSP. Meralco, for its part, must not be allowed  to push through with its PSAs in question” said Cosico.

AGHAM also asserted that contrary to claims made by Meralco that electricity prices would go down should these agreements push through, power rates may actually shoot up since Meralco grants its sister generation companies higher rate equivalent to 20% more than what non-related companies receive.

Liberalized, privatized industry

“This is another addition to the long list of Meralco’s schemes to further grant itself immense profit at the expense of the consumers and the people in general. This is allowed and worse, promoted, under the distorted framework of a liberalized and privatized energy industry,” laments Cosico. 

Cosico also underscored the need to end the privatized nature of the power industry. She noted that this can be achieved by junking the Electric Power Industry Reform Act (EPIRA), the law responsible for the privatization and restructuring of the industry.

“The government should reclaim the leading role and responsibility to provide affordable services and utilities to its populace,” ended Cosico.