Groups want probe into Meralco’s generation charge

Progressive partylist Bayan Muna and consumer advocacy group Matuwid na Singil sa Kuryente (MSK) are calling for an investigation into Manila Electric Co.’s (Meralco) generation charge, claiming that it could have been much lower.

In a statement, Bayan Muna chairman Neri Colmenares said that this year, Meralco boasts that its generation rate had gone down by 16% from P4.9039 per kilowatt-hour (kWh) in January to P4.12 per kWH in August.

“They like to point out that they negotiated hard with its IPPs (independent power producers) by declaring force majeure during this pandemic so the take or pay provisions of the contract were not applied, thus saving us consumers P1.5 billion. They want us to be thankful for the 16% reduction and for their good deed of saving us some money," Colmenares said.

Analysis from Bayan Muna and MSK, however, found that the fuel of IPPs’ plants, which is coal, had gone down by 28% from $69.66 in January to $50.34 in August.

“Additionally, the WESM (wholesale electricity spot market) price dropped 193% from P8.49 per kwh in January to only P2.421 per kwh in August," Colmenares said.

"So why did Meralco’s generation rate drop only 16%? Our analysts noticed that in Meralco’s generation mix is sticking out like a sore thumb, the Quezon Power Mauban’s average rate for the period January to September 2020 of P6.73 per kwh. It is 51% higher than AC Energy at P4.55, 66% higher than San Miguels Sual at P4.051, an astonishing 82% higher than Therma Power in Pagbilao at P3.6549 per kwh. Quezon Power is 66% higher than the new 460-megawatt San Buenaventura coal plant at P4.0533 per kwh," the Bayan Muna chair said.

Colmenares said the discrepancies need a Congress or a Department of Energy (DOE) and Energy Regulatory Commission (ERC) investigation “to protect the public interest.”

Meralco spokesperson Joe Zaldarriaga, however, said that the company’s retail rates have significantly gone down to its lowest levels in years.

“In fact, at around P8 per kWh, it has already gone down by almost P1 per kwh on a year to date comparison,” he said.

“The generation charge on the other hand has dropped by 17% during the same period last year as a result of our newly implemented power supply agreements which took effect last year,” he added.

Zaldarriaga emphasized that Meralco’s power supply agreements, including the rates therein, have undergone public hearings participated in by various groups.

“It is duly and legally approved by the regulator and has fully complied with lawful requirements. Important to note as well, all of Meralco’s pass-through charges also undergo confirmation hearings by ERC,” he said.

MSK convenor David Celestra-Tan, for his part, is not convinced, pointing the contrast in the cost of power from other coal producers compared to Quezon Power’s, which is Meralco’s IPP.

"In terms of absolute numbers, for the first nine months of 2020 Meralco bought 1.601 billion kWh of electricity from QPPL at an average price of P6.73 per kwh. The average price of all other coal power suppliers to Meralco for that period is about P4.20 per kwh. In fact, the Pagbilao plant of Aboitiz sold only at an average P3.68 per kwh and San Miguel Sual at P4.05 per kwh for the period," Celestra-Tan said.

"This means Meralco paid Quezon Power P2.53 per kWh higher than the average or at a total cost of P4.05 billion premium to its partner Quezon Power so far this year 2020. That P4.05 billion had been passed on to the Meralco consumers," he said.

“Definitely this needs a probe to know the truth,” he said. — BM, GMA News