Consumer group wants Quezon power firm probed for charging higher rates

MANILA — Bayan Muna chair Neri Colmenares and consumer group Matuwid na Singil sa Kuryente (MSK) convenor David Celestra-Tan on Tuesday asked for a probe of a coal power plant in Quezon province for allegedly charging rates higher than other coal plants in the country.

In a statement, Colmenares and Celestra-Tan claimed that the firm, Quezon Mauban Power, is charging its consumers rates that are from 51 percent to 82 percent higher than its counterparts despite the fact that the price of coal has gone down.

They said a congressional probe or an investigation by either the Department of Energy or the Energy Regulatory Commission should be undertaken to check and stop this practice.

The two said that this year, Meralco has reported a decrease in its generation rate from P4.9039 per kwh in January to P4.12 per kwh in August, or a 16-percent reduction. The power distribution firm, they added, also reported having negotiated with its independent power producers (IPP) to declare a force majeure during the COVID-19 pandemic so the take-or-pay provisions of their contracts would not be applied, thus saving consumers P1.5 billion.

“They want us to be thankful for the 16 percent reduction and for their good deed of saving us some money,” Colmenares and Celestra-Tan said.

However, analysts from Bayan Muna and MSK noted that the price of coal being used by Quezon Mauban Power and the other coal plants has gone down by 28 percent, from $69.66 in January to $50.34 in August.  They also noted that the WESM price dropped 193 percent from P8.49 per kwh in January to only P2.421 per kwh in August.

The analysts then asked why Quezon Power Mauban’s average rate of P6.73 per kwh for the period January to September 2020 was higher than the other coal plants.

“It is 51 percent higher than AC Energy’s P4.55 per kwh rate, 66 percent higher than San Miguel Sual’s P4.051 per kwh, 66 percent higher than the new 460mw San Buenaventura’s P4.0533 per kwh, and 82 percent higher than Therma Power’s P3.6549 per kwh,” Celestra-Tan pointed out.

“There is a lot that needs to be explained in the Quezon Power charges that are passed on to the consumers. In January its rate was P6.5919 per kwh. Inexplicably it went up to P6.723 per kwh despite coal prices coming down by 28 percent during that period. This is anomalous and needs a Congress or a DOE and ERC investigation to protect the public interest,” said Colmenares.

Celestra-Tan also said Quezon Power Mauban’s rate of P6.5919 per kwh last January was a  stark contrast to the other coal power suppliers of Meralco. “Masinloc’s was P5.4658 per kwh, Luzon Therma of Aboitiz in Pagbilao at P3.9001 per kwh, San Miguel Sual at P4.0689 per kwh and AC Energy at P4.2366 per kwh. That’s an average premium of 52.4 percent!  And that is not to mention the P28 per kwh rate that Meralco paid Quezon Power Mauban last March and passed on to the consumers,” he added.

“In terms of absolute numbers, for the first 9 months of 2020 Meralco bought 1.601 billion kwh of electricity from Quezon Power 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,” he explained.

“This means Meralco paid Quezon Power P2.53 per kwh higher (6.73 – 4.20) than the average or at a total cost of P4.05 billion premium to its partner so far this year 2020. That P4.05 billion had been passed on to Meralco consumers,” he said.

“Also by contrast, our analysis of Meralco generation purchases for the previous year 2019 showed that Quezon Power’s rates were higher as they had always been since its start in 2000, but it was only 9 to 12 percent higher than other coal plants. What mystery happened in 2020? Definitely this needs a probe to know the truth,” ended Celestra-Tan.