Groups urge energy body to cancel pending PSAs

MANILA, Philippines – Groups under the Power for People (P4P Coalition) have urged the Energy Regulatory Commission (ERC) to immediately cancel the seven power supply agreements (PSAs) of Meralco which have been pending with the ERC for two years.

“The 7 PSAs have long been found anomalous for not following the competitive selection process inscribed in the law. After almost two years of ERC inaction they should be rescinded,” said Ian Rivera, National Coordinator of PMCJ, during a rally held earlier this week in front of the ERC headquarters under the call Malinis at Murang Kuryente (MMK).

“ERC must nullify these contracts now, in the interest of the electricity consumers, or else the impasse will embolden Meralco to claim damages from the government. What will the government do with the declared P15 billion increase of the project cost of AE1 due to the delay of the PSA, which MGEN, a sister company of Meralco, claims? Who will shoulder this additional cost? Will it be unjustly passed on to the consumers as before?” Rivera said.

In May 2016, Meralco asked for regulatory approval of its seven PSAs from various energy generation companies covering 3,551 megawatts (MW) capacity to meet the expected increase in power demand.

The PSAs were challenged by consumer groups and P4P for circumventing the Competitive Selection Process (CSP).

“Failure to undergo the mandatory CSP will result in expensive electricity rates. The PSAs should have been terminated by ERC to pave the way for another CSP. Because the PSAs are not cancelled or declared invalid, Meralco has no recourse but to stick to their submission. The consumers will surely be at a disadvantage,” said Flora Santos, of the progressive women’s group ORIANG.

“The town of Atimonan in Quezon has been affected because of ERC’s failure to cancel the PSAs,” said Fr. Warren Puno, a catholic priest and leader of the Quezon province environment group.

“Atimonan people were made to believe that the coal project there is still a go, despite several protests and the dislocation of fisherfolks and farmers. Some people were promised jobs but minimal work is available. ”

“The failure of ERC to immediately terminate the PSAs speaks of weak regulation. Electric consumers are not being protected from anomalous transactions. This destroys confidence in the energy market and sets a dangerous precedent for energy developers who wish to offset fair play rules,” said Gerry Arances, the convenor of the P4P Coalition.

“Time and again, the regulatory office favors an energy player sans the rules of competition. It is about time that this be corrected. Electricity consumers should push for reforms,” Arances said.

Atty. Aaron Pedrosa, Secretary General of Sanlakas, said they are seeking an explanation from ERC Commissioner Agnes Devanadera as she is supposed to enforce and protect the public from onerous contracts./asu