ERC’s Extension of CSP Effectivity Could Be Costly for Consumers and A Big Step Back in Drive Against Monopolization of Generation Sector

David Celestra Tan and Evelyn Viray, MSK
28 March 2016

The ERC issued a new Resolution postponing the effectivity of the mandatory CSP for new power supply contracts to April 30, 2016 from November 30, 2015. What would seem an innocuous extension of a deadline actually have larger implications to consumer rates and the monopolization of the generation sector. That’s a five (5) months delay, a lot of time to allow the exemption of many bilateral contracts and deny the electric consumers the benefit of competition for the long term.

While we agree that there has to be a sane transitional process this must be consistent with always promoting the interest of electric consumers which are the right to adequate supply of power and right to least cost electricity.

MSK therefore wishes to go direct to the crux of the matter of ERC’s five (5) month postponement of the mandatory CSP. The resulting exemption of Meralco’s desired 1,200mw bilateral contract with its sister company Meralco PowerGen in Atimonan, Quezon and who knows maybe another 1,500mw for a natural gas project in Quezon or Batangas. If these long term power supply contracts are allowed by the ERC as a result of Resolution 1 postponement, then we have denied again the right of consumers to least cost power as market-determined through open competitive bidding. The CSP policy would be once again a Pyrrhic victory for the consumers.

ERC’s Resolution 1 of 2016 signed by the five Commissioners on March 15, 2016 took cognizance of the right of captive electric consumers to “least cost power” and its rationale for the postponement of the CSP mandatory date in the following:

“WHEREAS, after judicious study and due consideration of the different perspectives raised in the aforementioned letters, with the end in view of ensuring the successful implementation of the CSP for the benefit of consumers, DUs, and GenCos, the Commission has resolved to allow a period of transition the full implementation of the CSP Resolution and, as such, restates the effectivity date of the CSP Resolution to a later date;”

Once again, we are putting all these new rules supposedly to promote the interest of the consumers and now in the implementation allowing the manipulation in effectivity that will again sell down the consumers. Another case of wanting to mandate CSP but again forgetting why we are doing it?

The issue here is self-negotiated contracts with sister companies as part of a sane transitional process.

ERC’s Resolution 1 of 2016 is not clear on safeguards for protection of electric consumers against negotiated sweetheart deals. As the Epira Law clearly declares supply of electricity is imbued with public interest. And it is the legal duty of the ERC, the DOE, PEMC, and JCPC to look vigilantly after the public interest.

As we stated, a reasonable, practical, and sane transitional process must have two hallmarks to be consistent with public interest and those are:

1) it must help assure adequate supply of power and
2) it must assure least cost electricity.

We agree also that we must be as fair and reasonable to the DU and the generator. However, we must not cross the line towards sacrificing the submissive consumers. Perhaps the ERC can consider some level of safeguards for electric consumers during the transition period.

a. Pending Projects between DU’s and unrelated generators
The pending power supply contracts of DU’s with unrelated power generators may be reasonably presumed to be done on arms-length basis and hence may not be sweetheart in prices and terms. Their implementation may be needed to allow the continuation of power supply development. Yet, we have to assure the consumers rights to least cost power.

In this case, it will be reasonable to allow a CSP as a transitional process called Swiss challenge that is administered independently. This way the DU and its chosen generator caught in the transition period will have nonetheless the vested right to match the winning bidder and the consumers are nonetheless assured of a level of market tested rate. Not perfect but it is a transitional process.

b. Signed Projects of a DU and its sister company generator
The desired contracts of DU-generator groups like Meralco and Aboitiz with their own sister company generators are entirely different matters. They are NOT arms-length and hence with high probability of sweetheart prices and terms that are inimical to the public interest.

Whether or not the proposed projects must be allowed a transitional CSP must be determined by the ERC if they are critical for timely assurance of adequate supply to the particular DU. The other consideration is the public interest.

To respect the right of consumers to least cost power, it would have been appropriate to also subject these sister company contracts to CSP administered independently if Meralco wants their affiliates to participate.

c. Meralco’s 1200mw Coal Project in Atimonan, Quezon
In the case of Meralco and Metro-Pacific they have already gotten away with a total of 1,060mw of coal projects for Redondo Power in Subic and in Mauban, Quezon. The rates approved were P4.26 per kwh compared to a truly competitive bidding done by eight electric cooperatives in the North for only 125mw but got 3.76 per kwh or a difference of P0.50 per kwh. Not satisfied because they really want 3,000mw of negotiated deals for its sister generator Meralco PowerGen. It is evident that they have been lobbying to allowed to do a CSP Swiss Challenge that would be administered by their own people for their 1,200mw coal project in Atimonan, Quezon. This will appear like they are complying with the CSP policy but not in a way that is truly competitive. They don’t even want an independent bid administrator to assure a transparent, honest to goodness, and judicious bidding.

It might be recalled that the CSP policy was adopted by the DOE nine (9) months ago on June 30, 2015. And with all the delays and deliberations the ERC was able to issue its own CSP implementing policy Resolution 13 2015. We would think that during this time period, if Meralco’s 1200mw 3rd project in Atimonan Quezon was really finalized and signed it would have been filed with the ERC during that period.

Press reports said Meralco expects the completion of the 455mw San Buenaventura Power in Mauban in 2019 and the 600mw Redondo Peninsula Energy in Subic in late 2019. These two appear to have been filed with the ERC to beat the November 2015 original deadline. The 1200mw Atimonan One Energy which is announced for completion in late 2020 and another 1500mw natural gas project being pursued by Meralco evidently did not make the already delayed implementation of CSP.

The ERC’s sweeping postponement of the CSP implementation to April 30, 2016 will work out to be even better for Meralco and for Aboitiz.

The extension of the CSP effectivity will also be a big blow to the hoped for reduction in the monopolization of the generation sector. The three projects totaling 2,260mw will corner about 40% of the energy needs of Meralco. Another 1500mw Gas project would carve out another 25%. If we add the 1500mw First Gas and the 440mw Quezon Power also cornering about 30%% that will give a total of 95% of negotiated sweetheart prices passed on to the consumers. Long term the rest of the power generation sector will battle for the minor markets.

How much will these exempted new sweetheart power supply contracts cost the consumers?

We calculate that the total of 2,060mw of coal project that Meralco PowerGen can have at 70% load factor guaranteed power supply agreement will own a minimum of 12.6 billion kwh a year in sales to Meralco. At an overprice of P0.40 per kwh, that means P5 billion a year in additional charges to electric consumers. At a minimum of 20 years, that would mean P100 billion charged to consumers. And that doesn’t count the over prices from 15 million tons a year of Indonesian coal that will be passed on to the consumers without benefit of bidding.

Let us observe how many Meralco and Aboitiz power supply contracts will be filed in April to beat the new ERC deadline.

We hope these facts will not be lost as the ERC tries to implement the CSP aspiration for the country. The larger implication of the extension of the CSP deadline to April 30, 2016 in addition to the 10’s of billions of additional charges to consumers is this could be the final blow to hopes of curtailing the monopolization of the power generation sector in Luzon. With so much market domination in power generation supply the WESM market will just be a peripheral sector.

With our past experience with the Arroyo ERC always letting down the consumers, we cannot be faulted for being suspicious and paranoid. We are willing and will be delighted to be proven wrong. It does not look good though.

We hope the Pnoy ERC Commissioners led by new Chair Salazar would have a wonderful trick up their sleeves that will benefit the consumers. Perhaps the captive consumers of Meralco can somehow be protected by subjecting these Meralco PowerGen projects to a truly competitive CSP administered by a truly independent party if Meralco really wants their sister company to participate.

Author’s notes: This has been edited from yesterday’s draft. We are sorry for the errors in facts.

Matuwid na Singil sa Kuryente Consumer Alliance Inc.
Matuwid.org

 

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Is it Too Much to Expect Consumer Fairness from Meralco? Praying for Divine Intervention.

David Celestra Tan, MSK
18 March 2016

Are Meralco consumers expecting too much fairness from the distribution utility? Are they not entitled to make money for their investments? Does our organization MSK have reason to continue to be vigilant and complaining?

Many businessmen who are heavy users of power actually think Meralco is a good and customer caring distribution utility. It helps them reduce their energy consumption through various highly publicized programs such as the POP (peak off-peak), demand side management, and etc. You see these large ads regularly specially in MVP-identified newspapers chronicling those grateful businessmen singing the praises of Meralco. ( aren’t those expensive ads part of Meralco’s expenses charged to the consumers?)

Indeed Meralco works hard to give large industrial consumers a better deal and they have wonderful programs. Are they doing it because they are such good guys with a customer-centric corporate soul?

Actually the reason is it is a necessity for them to protect their markets because those large energy consumers are “contestable customers” who have the option of choosing their own power generation suppliers. If they don’t make them loyal by giving them better deals, they could lose those customers. It is also the reason they want to be a RES (retail electricity supplier). Let us give them though the benefit of the doubt that they are doing those wonderful programs because they truly care for their customers and they want them to reduce their energy consumption. Fair enough.

The question though is what are they doing for their “captive customers”, those who are consuming 200 to 10,000 kwh a month (residential and commercial customers), who have no choice but to get power from Meralco? Do they have similar energy cost reduction programs for them? Meralco earns 55 to 60% of their revenue from these customers who have no choice.

The captive consumers concern is not what Meralco is doing for them but what it is doing to them?

If Meralco is as customer caring as they are to their large energy customers, why are they doing the opposite to their captive customers? Is the reason because those customers are actually captive and have no choice but to stay with Meralco and hence there is no reason for them to be really good to residential and commercial users other than in press releases?

Fighting and Circumventing CSP

This is evident in the case of the implementation of the government’s policy of subjecting the long term bilateral contracts of distribution utilities to competitive bidding or CSP (competitive selection process). Meralco, as the largest distribution utility in the country with control over 70% of the power needs of the country, is clearly intent on also monopolizing the power generation supply through theit own Meralco PowerGen and announced their target of 3,000mw of new power supply projects. We calculate that if they get their way Meralco PowerGen within 5 years will bring to 85% the sweetheart deals of Meralco. We calculate that the sweetheart prices on those negotiated contracts cost the Meralco consumers 12 to 18%. And that’s tens of billions a year in excess charges to consumers.

This is a major reason Meralco has the highest retail rates in the Asian region and former Energy Secretary Carlos Jericho Petilla, luckily for the consumers, took the bold step of passing a game changing policy of requiring the power supply contracts that are passed on to the consumers should be subject to competitive selection process. (it is unlikely that Senatorial Candidate Petilla is getting any support from the MVP and Aboitiz groups for standing up for the people, who should now at least vote him in).

Meralco argued against the CSP policy and lobbied for its delay or making it voluntary, complete with media disinformation. Later they hinted about going to the Courts to have the policy declared illegal. Eventually they relented and on the surface announced they will comply with the CSP policy. But it turned out it will be their own CSP policy. They lobbied against the appointment of an independent bid administrator and have been pushing for the adoption of Swiss challenge as an acceptable (and legal) way of competitive bidding. They are referring to the BOT law that recognizes Swiss Challenge. (See our previous article on Swiss Challenge, Games People Play).For good measure they even conducted CSP’s for short term power reserve contracts from diesel plants to seemingly demonstrate the concept of self-administered “price challenge”. (Look Ma, No Hands!)

The bottom line is Meralco is unwilling to provide the captive consumers that provide 60% of their revenue the chance to reduce their power rates and be treated better through the benefit of a truly competitive bidding. Because these consumers are captive and cannot go anywhere. Meralco already got away with 1060mw of new power generating projects for Mauban and Subic which by themselves will cost the consumers P10 billion a year in higher rates. And now clearly they want to assure another 2,000mw for Meralco PowerGen through self-administered and swiss challenge biddings.

Is it too much to Expect Consumer Fairness from Meralco?

Meralco is a public service utility granted a public utility franchise by the people through the government. Note that franchises for public utilities are providing the essential services to the people on behalf of the government. Just like Water, roads, telecoms.

To encourage the private sector, the monopoly distribution franchise protects the investor from competition and under current regulations are guaranteed a return on their investment. It is also protected from many usual business risks such as inflation, currency exchange fluctuations, fuel price increases, salary perks. All those risks are passed on to the consumers.

The Arroyo ERC even did not quiver when Meralco granted bonuses to its top executives of P100’s of millions. All those are passed on to the consumers.

After years of rate setting tricks including the phase out of the old RORB, return on rate base, the return of investment by a distribution utility is no longer capped at 12%. Even corporate income taxes are effectively passed on to the consumers. That 12% is now 14% WACC and the base amount is no longer what Meralco actually invested and is spending to provide the services but also their projected investments. In other words the returns are higher and the basis for the computations is larger.

Those Meralco rates approved by the ERC are based on an estimate energy sales per year. When the economy grows and the energy consumption exceeds the estimate, then they make a windfall. So believe it when Meralco announces that they are making P19 billion this year “because of higher energy sales”. The irony is if the energy sales is lower, they will come back to the ERC to recover the “under recovery”. I tell you, consumers are screwed coming and going. In the last available data, for 2014 Meralco’s gross sales is 261.74 Billion and cost of power is 207.24 billion. That leaves technically P54.50 billion in gross revenue as the distribution utility. A net profit of P19 billion is equivalent to more than 35%! And that does not count the income that they are making on the generation side. That is unconscionable for a government granted monopoly distribution franchise that is supposed to be public services.

Nonetheless, consumers should not be complaining about the amount of money they are making. Just the unfair and exploitive way they are making them.

Rules are now blurred including how the systems loss is computed. We suspect that the Metro Pacific group coming in had been convinced that these public utilities actually allow maximization of profits…..and monopolization of the generation side because of Rule 11 of the EPIRA IRR. Electric distribution is now regulated only in name and process.

Many professional groups have been convinced that Meralco is now being subjected to competition through open access. That is only for the generation part. Meralco is still the exclusive provider of the distribution wires and the one who will charge you for their share of the generation rates at sweetheart prices including their obligations to the IPP’s for undispatched or stranded supply contracts. They still will charge for systems loss recovery, for the bloated “performance based rate” that include profits on investments not incurred, and etc.

It is inherent in a public service utility that is protected by a people granted franchise to treat the public properly and with respect. We believe denying the consumers the benefit of truly competitive bidding and clearly insisting on gaming the process is very disrespectful to the electric consumers. In addition to the provisions of their public service franchise, the Epira law also require them to provide the electric service in the least cost manner. And least cost is not for Meralco to define. There cannot be least cost unless there is true competition in both power supply and supply of materials, equipment, and services. Those are all passed on to the consumers.

It is not too much for electric consumers to ask for fairness from Meralco. And as long as there are over charges we will not stop being vigilant and complaining. After all every month those overcharged electric bills come and we pay them out of hard earned money, sometimes starving our own children with their own “baon” just so Meralco will not cut off the power.

Maybe the powers that be at Meralco might find fairness in their hearts during this coming holy week.

By the Way, electric consumers should Vote for Carlos Jericho Petilla for Senator, No. 41!!

And Candidate Neri Colmenares who also sometimes speak for electric consumers.

Matuwid na Singil sa Kuryente Consumer Alliance Inc.
Matuwid.org

Truth and Dangers of PEMC’s P8.29 Billion Benefit of RE to Consumers

PEMC announced in late January to the hapless electric consumers that the Renewable Energy suppliers that are enjoying Feed-In Tariff subsidies have actually saved consumers P8.29 billion for one year from the wholesale electricity market and that it resulted to a net savings of P4.0 billion after deducting the approximately P4.29 billion RE subsidy that are already being charged to the consumers.

If we follow the logic of the announcement the government policy makers must support the implementation of more and more wind and solar projects because they save billions to consumers.

MSK could not believe it because they were talking about solar power that cost the consumers P8.68 to 9.68 per kwh and wind that is subsidized at P8.53 per kwh. The incredible report was released by a certain Jonathan dela Vina, a research specialist at the PEMC that manages the WESM. While wishing to bear out the good news, MSK requested PEMC for clarification on the validity of the claims, the methodology that they used and the accuracy and truthfulness of the claimed benefit.

Is PEMC doing its own hoodwinking of the consumers just like Meralco?

MSK received a clarification from Mr. Robinson Descanso, Vice-President for Corporate Planning and Communications of PEMC. We are posting his full response.

1. Was the claimed P8.29 billion reduction of WESM price due to the fact that the additional supply of 682.91mw was from Renewable Energy or would the reduction also resulted if the 682.91 mw additional supply came from cheaper and non-subsidized power such as coal, natural1 gas, or other sources?

PEMC’s answer:

The market price study did not compare if those 682.9 MW of increased WESM supply were from new coal, natural gas power plants or diesel plants. Although those conventional plants may be said to be cheaper than developing renewable energy, the accelerated development of renewable energy resources in the country through special programs such as the FIT system is a thrust of the government. The integration of FIT-qualified resources, however, also has cost benefits to the system, more specially on WESM prices, as has been experienced in other jurisdictions. The objective of PEMC’s paper is to estimate the benefit on WESM prices based on historical data”.

 

MSK’s concern is giving P8 per kwh RE power the full credit for the reduction when in fact the same reduction could have been achieved if the additional 682.9mw came from cheaper sources at P4.50 per kwh.

2. Did they consider the ancillary services cost for Wind and Solar which comprised 537.9mw or 79% of the 682.9mw supplied?

Mr. Descanso’s response said:

 

we wish to note that no additional cost for ancillary services were assumed in the paper. This assumption is brought about by the fact that the system operator (NGCP) did not file with the ERC for any additional reserve requirements to specifically address intermittency of RE; hence, the assumption is that the current ancillary service supply is sufficient considering the current penetration level of RE in the grid. On the other hand, we do not discount the possibility that the system operator may require additional reserves in the future.”

In other words the claimed net benefit of P4.00 billion to consumers after the subsidy of P4.29 billion is not really accurate because as they admitted the cost of ancillary services to support the intermittent RE have not been considered.

In Meralco’s recent rate increased they disclosed that about P0.08 per kwh of NGCP additional charges were made due to additional ancillary services bought by NGCP. And we assume a big part of those was to support the RE intermittence in the Luzon Grid. If Meralco sells 30 billion kwh a year of power, the P0.08 per kwh translates to P2.4 billion a year, a big bite out of the claimed market savings from RE.

3. PEMC’s P8.29 billion market reduction is based on a value of P1.00 per kwh. How did they determine this?

“the simulation indicates that the diesel plant was required to serve the demand of the system without the FIT-qualified resources, which resulted to a MCP of P / kWh in this example. The conclusion for this example then is that the presence of the FIT-qualified resources resulted to a P 4 / kWh decrease in the spot price for the specific interval.”

In their graphs the price of diesel energy was P8.50 kwh which became the MCP or market clearing price. If we had additional supply from P4.00 per kwh natural gas, the expensive diesel at P8.50 per kwh would not have been the Basis for the market clearing price. Then the valuation of RE energy would not have been exaggerated.

It is very dangerous when government agencies including PEMC would announce tremendous benefits that could mislead the public and the government policy makers on energy regarding the benefits of Renewable Energy. Once again, we caution about lumping the expensive and highly subsidized and system disruptive RE like solar and wind with grid competitive RE such as biomass and mini-hydro.

Let us hope some people at PEMC are not participating in yet another hoodwinking of the electric consumers into thinking that the P8.68 per kwh solar and wind must be implemented in unlimited basis of up to 3,500 mw when they are highly subsidized already by the consumers. There are some facts about the energy output of wind and solar that we should note however based on the response of Mr. Descanso. And should be noted by the ERC when evaluating the economics and returns of Wind for P8.53 per kwh price.

1. Solar generation
solar power plants generate the bulk of their energy from 8AM to 4PM according to WESM data. As a result, the dispatch of diesel plants during those hours were lessened. Based on your simulation, the production from diesel plants were reduced by an average of 22% during the same timeframe (i.e., 8AM to 4 PM) due to the integration of all FIT-qualified resources in the WESM.”

We were told its only from 11 to 5 with low load factors and high needed tariff.

2. Wind generation
“wind power plants generate the bulk of their energy from 12PM to 9 PM according to WESM data. Unlike solar power plants however, wind power plants may still generate around 80% of its peak generation outside those hours.”

Were this energy output and load factors consistent with the claims of the wind developers to the ERC and DOE when they justified the P8.68 per kwh FIT?

We ask PEMC President Mel de Ocampo to look into these misleading releases and half-truths that dangerously lead to wrong policy directions.

The PEMC report was curiously serving the interest of the solar and wind lobbyists who have been wanting an expanded solar and wind program at those subsidy levels that run P4.00 per kwh. Consumers should nonetheless welcome the development of clean energy in the country. However these RE providers must be willing to provide the service cost effectively and not be spoiled by such high rates. They must be willing to deserve the business through CSP as announced by the DOE.

For those interested in the details, we are providing in this website the full text of PEMC’s response as a download.

A blessed Holy week to everybody.

Matuwid na Singil sa Kuryente Consumer Alliance Inc.

Update on CSP Front Part 3: Meralco’s Most Brazen Consumer Hoodwinking May Yet to Come on CSP

David Celestra Tan, MSK
1 March 2016

When Meralco supposedly agreed to respect the new policy for CSP contracting of power generation supply we were pleasantly surprised about the enlightened position of the long reviled utility. But now it seems the consumers cannot really drop its guard.

In the annals of its public hoodwinking, Meralco may yet to top itself in brazenness in its supposed compliance with the government and regulatory policy of subjecting to Competitive Selection Process (CSP) the power generation costs that are passed on to the consumers.

The policy is supposed to open the power supply contracts to competitive bidding to bring down power generation costs to the consumers instead of continuing to allow the electric distribution utilities to just negotiate with their sister generators at sweetheart prices that tend to be 15% to 25% higher than non-affiliated generators. When the Department of Energy and the Energy Regulatory Commission steadfastly mandated CSP to bring to the consumers the lower price benefits of open competitive bidding of generation supply, Meralco after initially resisting and threatening to sue, decided to change course and announced that it would comply with the CSP policy.

In quick succession Meralco publicized the bidding through a “price challenge” of its short term reserve power supply supposedly for the summer. With impressive quickness, they announced the awards of power supply contracts with Vivant in Bauang for 100mw, Panay Power in Iloilo for 45mw, who, not surprisingly, did not have any competition.

Meralco clearly wanted to preserve a royal privilege to negotiate power supply contracts with sister generators and pass on their sweetheart prices to the consumers. They have been fighting tooth and nail against the mandatory use of independent Third Party bid administrators and for the use of swiss challenge. Unmistakably they wanted to run the bidding themselves and choose their proponent whose offer will be subjected to “price challenge”. Apparently the above biddings were intended to be “proof of concept” biddings. It’s a giant hoodwink to the regulators, the government, and the consuming public.

By their recent posture and their unmistakable threat to sue the ERC and DOE if they require open bidding independently administered by third parties, Meralco intends to conduct the CSP for the plum 2,000mw of their target additional contract for its sister company by using the swiss or price challenge managed by themselves as they thought they demonstrated in the above gesture biddings.

Meralco says with a straight face that Swiss Challenge is a legal and acceptable form of CSP and that it is their right to manage the biddings themselves with the clear signal that their battery of lawyers will defend this position in court.

Three of the five Commissioners at the ERC a including its Chairman are lawyers and can be expected to take pause and consider the ramifications of a legal battle with Meralco. The sad thing is the regulators, sufficiently threatened will take time to pass its more detailed implementing rules of the CSP, specifically on the issue of whether swiss challenge would be truly competitive and how the bidding can be truly transparent, objective, and level in playing field. In fact, the ERC had announced it will take six (6) months which is a long time to put power development on hold.

Consumers had been complaining about Meralco’s high generation charges resulting from sweetheart long term supply contracts they negotiated with sister and friendly company generators that up to today had been supplying 47% of its energy requirements. Meralco had been openly announcing that they target 3,000mw of long term power supply contracts with its sister company Meralco PowerGen. If they succeed MSK estimates that fully 85% of the energy needs of Meralco whose sweetheart prices will be charged to the consumers.

Meralco was able to beat the anticipated mandatory CSP policy for its 600mw Redondo Power in Subic and 460mw Mauban coal expansion which was negotiated at P4.30 per kwh compared to the P3.78 per kwh that electric coops got from its open bidding in the North. That’s a P0.52 per kwh difference with an estimated overprice of P1.74 billion a year or P34.8 billion in its 20 year contract.

Meralco may be intent on only complying with the form and gesture of Competitive Selection Process instead of the spirit of open and true competitive bidding for their bilateral power supply contracts for the plum long-term base load requirements.

The game plan it appears is to hold “price challenge” biddings for their minor emergency power requirements, forms of Swiss Challenge, that are totally managed by themselves and claim to the world that their proposed brand of CSP works. Of course, those type of short term reserve power contracts are for this summer that Meralco’s affiliate Meralco PowerGen does not have capacity for and hence unable to participate. Good for their gesture biddings that will have the effect of convincing the ERC, DOE, and the electric consumers that

1) Swiss or price challenge is okey and

2) self-managed CSP is okey and there is no need for an Independent Bidding Administrator or Third Party.

At stake will be Meralco’s future base-load power supply totaling 2,000mw for 20 years. Meralco captive consumers should brace themselves for another letdown in the supposed policy for DU’s like Meralco to subject to competitive bidding their power generation charge that are passed on to the electric consumers.

We in the 3 Piso Movement and all our allied cause oriented groups must prepare to take a stand in this brazen hoodwinking by Meralco. We will stand hand in hand with the DOE and the ERC and all patriotic and self-respecting Filipinos in this classic battle with Meralco for the consumers right to truly competitive and market tested generation charges vs their royal right to charge the consumers their negotiated sister company rates. There may be a need to challenge their suitability as a holder of a public service utility franchise.

Meralco’s monopoly right for their distribution franchise did not include a royal right to monopolize also the generation market.

Let us get ready to take a stand against Meralco’s apparent intent to hoodwink the public on its CSP compliance. Meralco’s CSP charade is quite brazen!

Matuwid na Singil sa Kuryente Consumer Alliance Inc.