An Uncontrollable 800-Lb Gorilla in Distribution like Meralco is Disruptive of Social Order.

And What They are Trying to be is Even More Menacing.

 

David Celestra Tan, MSK
23 December 2019

An American riddle goes:  “Where does an 800-Lb Gorilla Sit?  Answer:  Anywhere it wants to!”

“800-pound gorilla” is an American English expression for a person or organization so powerful that it can act without regard to the rights of others or the law. It is so powerful (either by size or by influence) that it does not need to heed the rules or Threats of others.

In American economy a dominant organization that can overpower competition and government is called an 800-Lb Gorilla. It dictates on the market and stumps on competition and many times even captures government regulation. American free enterprise on which the Philippine economy is patterned is founded on a truly functioning market competition to protect the consumers. And it frowns upon 800-lb gorillas.  It is vigilant on anti-competitive behavior and has a strong anti-trust legislation. When AT&T became so big as to dominate 70% of the telecom sector, they broke it up into baby-bells. In recent years they investigated Microsoft, Apple, Amazon, and Facebook for anti-competitive behavior.

In our country, Meralco as a distribution utility is no less dominating as the proverbial 800-Lb Gorilla. They serve 74% of the energy needs of Luzon and about 65% of the whole country. Its mega-franchise covers Metro-Manila and the National Capital Region, 36 Cities, 75 municipalities, the nerve center of the country’s economic, industrial government, and education activity.

To feel the imposing dominance of Meralco as a distribution utility, all of the country’s 138 electric distributors combined is not even half the size of Meralco’s 7,399mw, fully 68% of the 10,876mw demand of the main island of Luzon. And it is also the fastest growing at an average of 6.8% in the last 9 years. This is probably faster in 2019 when the POGO’s and business process sectors boomed in Metro-Manila.

Meralco’s mega-franchise area is bigger than the service areas of Manila Water and Maynilad Water combined!  And it is not just the  imposing size but the demonstrated voraciousness in the pursuit of self-dealing opportunities that makes it menacing.

Meralco’s financial might is just as overpowering. Its market cap is P428.3 billion, Annual revenues of P304.5 Billion, EBITDA of P37.2 billion, net income of P23.0 Billion, and cash resources of P36.42 billion. One call from Meralco and the banks shiver if its deposits are pulled out. One complaint from Meralco threatening to pull out their groups multi-million advertising can turn newspapers into pussycats. And don’t forget that we have elections every three (3) years.

Their annual advertising budget and regulatory compliance resources exceeds P500 million a year, ironically approved by the Energy Regulatory Commission and charged to the consumers as part of the PBR rate.

So, “How much does Meralco charge its customers?…. Whatever it wants to!

The Performance Based Rate making method allowed by ERC enables it to make  25% return on investment a year. It makes money on projected investments that it did not have to make.  Most of its power supply are negotiated. It tried to get away with 3,551mw of self-negotiated power supply with its own Meralco PowerGen with the gratuitous facilitation of the regulators who are supposed to protect the consumers. They almost got their way.

How much money can it make? ….. How much ever it wants to! 

As said so far they are making 25% per year. Their systems loss charges are essentially non-transparent charging Metro-Manila residents almost 10% above their 7.5% average and same as the outlying towns.  Their distribution charge is supposed to be P1.38 per kwh. But look at your bill if you consume 400kwh and more just like half of the consumers, and it is P2.98 per kwh. Meralco and ERC claims it is due to reallocation of the rate among different consumer classes. But it defies mathematical logic how an average of P1.38 per kwh will result from a high of P2.98 charged to a big portion of the residents and business establishments in Metro-Manila and the lowest is P1.01 per kwh.

What competitive rules does Meralco want to follow?…. Whichever it wants to!

Now rebuffed by the Supreme Court, it wants to do the CSP in its own way anyway. It managed to get a friendly version of the CSP guidelines passed in February 2018. Now it is resisting any form of safeguards that the DOE Secretary Cusi wanted on the CSP for the 1,200mw Atimonan coal project. The ERC for its part tried to get the DOE to adopt another Meralco friendly version of the CSP guideline. (Curious). 

Who does Meralco need to capture to assure he gets his way?… Whoever he needs to!

After being turned down in January 2016 by the then new ERC Chair Salazar to allow them to do CSP on swiss challenge basis, the ERC Commission apparently eventually gave in to Meralco in March 2016 for a friendly CSP and extended the CSP implementation to April 30, 2016. The consumer group Alyansa Para sa Bagong Pilipinas cried foul and complained to the Supreme Court, who found ERC guilty of extending the CSP without authority and ordered Meralco to undertake a CSP under a DOE CSP rules DC2018-02-0003. It appeared Meralco was ahead of the game. The DOE DC2018-02-0003 it turned out was very friendly to it with Meralco having full control of the CSP process.  And the DOE? It was relegated to being an “Observer”under Section 7 who cannot participate in the deliberations and needed to be invited by the DU to even become an observer. Do you think the DOE Guideline DC2018-02-0003 just happened to be everything Meralco wanted if it has to do a CSP as subsequently ruled by the SC? 

What does Meralco need to do to capture the regulators?… Whatever it needs to?

I guess there is no need to discuss the obvious. With so much multi billions a year at stake, resources, overpowering organization, culture, tenacity, and public information control, it can do whatever it needs to do maintain its firm grip on the evident regulatory capture, administration by administration.

How much of its 7,399mw power supply does it need to buy from itself? However much it wants to!

That’s what they are trying to do.

An 800lb gorilla would disrupt the country’s social, political, governance, moral, and economic order.

It is however not totally the evil deeds of Meralco. As a profit oriented private company, it is in its DNA to try to exploit opportunities to make money…as much as the rules (or implementors) are allowing. It is even possible that all these profit exploitations they are doing were presented to them to be legitimate earning practices by the people who sold the DU to them as part of the “sales pitch”.

It is really up to the regulators and policy makers to keep things under control and protect the consumers from being abused. Since 2001 when the Epira Law was passed however we have had eight (8) Energy Secretaries and six (6) ERC Chairmen, with no sign that this regulatory agency is starting to extricate itself from the firm clutches of regulatory bondage by Meralco. There is no argument that so far these government agencies have failed the public. That said, even when the opportunities are there, it doesn’t mean a franchised public service provider should exploit and abuse the vulnerable public if the policemen are not there to protect them. You don’t exploit the opportunity just because it is there. But then we cannot rely on the moral compass of the people running it.

We should really be able to rely on our regulators and policy makers. After all the Epira Law of 2001 that created them was very clear on their motu proprio responsibility to protect the public. We are just not implementing them with public interest in mind.

This is where the socio-economic disruption of an 800-lb Gorilla becomes menacing to consumers and governance. It is too uncontrollable…and irresistible.

What is even worse than having an 800-Lb Gorilla in Distribution?  Allowing another 800-lb Gorilla in power generation as is the evident corporate aim of Meralco PowerGen.

Ever wonder why industrial giants and fierce competitors like Ramon Ang of San Miguel, Aboitiz Family, Metro-Bank, DM Consunji, Ayala Group, Lopez Group, EGAT of Thailand, knelt down and commiserated to MV Pangilinan of Meralco to become his minority partners in the infamous 4,005mw midnight power supply contracts?

Because Meralco controls the market for power, the 800-lb gorilla of power distribution, they are essentially the gate-keeper to the power generation industry.  They are not only the 800-Lb Gorilla, there is no one even close to being a 150-Lb Gorilla. The two 2nd and 3rd biggest are The Aboitiz group’s Visayan Electric in Cebu only has 500mw and Davao Light has only 400mw.

Anyone who wants to build a power plant in the 300mw and above range will need to

Gain access to the huge Meralco market.  San Miguel saw it, Aboitiz knew it. Metrobank did too and sold its Global Business Power 1,000mw portfolio to the MVP group.

You cannot blame EGAT because they enjoy the most expensive coal power price that are passed on to the Filipino consumers. And their 460mw expansion that became San Buenaventura was reportedly originally offered at P4.80 per kwh and became P5.30 per kwh (10% higher) and became owned 50% by Meralco PowerGen.

The Ayala Group? They also saw it but was left out of the Meralco cartel. They sold their stake in GN Power to Aboitiz and decided to go “clean” energy. So does the Lopez Group which is now concentrating on natural gas.

Even the supposed solar energy initiative of Meralco in Bulacan turned out to be controlled by the MVP Group.   How much of the Solar Philippines agreement with Meralco will end up being owned by the MVP Group? Only time will tell.

Not many people realize that had the 3,551mw midnight 7 PSA’s gone through, it would have created a 14,000mw coal power cartel because the five (5) Meralco Powergen partners already owned more than 10,000mw of coal power plants in the country. This is Meralco imposing its will on the DOE and the President on the country’s energy mix and climate change goals.

We are sure at some point, Meralco media operators will claim that Meralco’s 4,005mw (including San Buenaventura) would be less than 50% of Meralco’s demand by the time they come on line in 2025. Unbeknownst to most people is that the 4,005mw actually represent 65% of the energy (kwh) needs of Meralco, way over the 50% allowed by Section 45 of the Epira Law.

How can it get away with it? Of course you can if you have been allowed to be the 800-Lb Gorilla in distribution and if also allowed to become the 800-lb gorilla in generation.

How will the electric consumers be treated by an 800-lb Gorilla? Anyway it wants to!

What’s unfortunate is the Epira Law for all its imperfections has enough provisions that can protect the public if used by an enlightened government. Yes, even by ERC. In fact it can easily shrink that 800-Lb gorilla to 600-Lb and be not as menacing. And the cards are there to further shrink it to a healthier 400-Lb Gorilla that will be more respectful of us the consumers.  

It will be sad if it is not done under the current government. We hope that at some point we realize that electric power service is about public service.

As we say in MSK, if not now when? If not you, who? 

Happy New Year!

 

Matuwid na Singil sa Kuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph

HEROES OF OUR TIMES – IN THE POWER SECTOR (Part 1)

David Celestra Tan, MSK
29 November 2019

Part 1

The way we the electric consumers are being treated and overcharged, the way our distribution utilities and sister generators and partners try all sorts of schemes  to outsmart government attempts to create true competition and get away with them, the way our own government officials always succumb to the enticing power of the vested interests and fail to step up for the public interest, the way our approving agencies somehow funnel lucrative RE and ME government subsidies to evidently favored applicants, the way all these end up overcharging us the poor consumers, and the way the prospects for reforms in this country of ours seem bleaker by the day, it is easy to give up and think that our government officials are hopelessly apathetic to really looking after our interest, and that they are all part of this national conspiracy against us the people as electric consumers. Are they soul less or just clueless?

The more things and people change in the government agencies that oversee the power sector, the more things seem to remain the same or worse for the people.

Before we all give up on our race and country,  letus recognize a few knights in shining armors who over the years have done somethings to right the course for the electric consumers. Let us give them due credit and be inspired by their refreshing and hopeful statesmanship.

  1. First on our List is former Energy Secretary Carlos Jericho Ikot Petilla.

If CSP or competitive selection process have been in the news, a cornerstone of our power procurement policy,  and a raging battleground between Meralco and the rest of us, it is because Ikot Petilla saw the abuse of the consumers from negotiated power supply contracts and took the bold move to do something about it ….despite risking the ire of the major conglomerates. He passed a government policy to require competitive bidding for power supply contracts that will be passed on to the consumers and thus ushered in the CSP era in the main gridon June 2015 just before he resigned to run for the Senate, leaving us a lasting legacy. (CSP had been required in the missionary areas since 2004)

Up to that point, distribution utilities in the main grid like Meralco have been happily negotiating the power supply contracts that are all passed on to the consumers with whoever they choose and at whatever price and terms they can get away with.

Unfortunately IkotPetilla did not make it to the Senate in the 2016 election, denying us of one of the best Senators for energy that we never had.  Petilla ironically had the dubious distinction of putting in the CSP rules and at the same time had the bad luck of choosing an ERC Chairman who will not exactly be faithful to Petilla’s vision of a truly competitive generation market.  CSP may not still be perfect but at least it is a work in progress.  Without Petillas landmark move we still would not have a chance.  Thank you Sir, we are forever grateful. Hopefully at some point in the future, we will get the CSP done right.

  1. Current Energy Secretary Alfonso G. Cusi (and President Duterte)

a). One person who is fighting hard to insure that the CSP practice is adopted and done right is current DOE Secretary Alfonso G. Cusi. Before President Duterte got elected in 2016 and before Secretary Cusi got appointed, Meralco’s and ERC’s maneuverings to circumvent the CSP policy have already been in motion in April 2016.

After the Supreme Court declared ERC’s postponement of the CSP policy to be illegal and hence the resulting power supply contracts that exploited the extended time need to go back to the drawing board and undertake CSP’s, the challenge of insuring, under immense lobby pressure from friends and politicians, that the CSP process is done right and not manipulated fell on the shoulders of Secretary Cusi. And he has a tough job since he is also battling the CSP maneuverings of his own bureaucracy.

We understand he is working on new CSP guidelines to tighten the rules.

b.) He had done more though. One thing Secretary Cusi saw early in his tenure as Energy Secretary is the need to accelerate power supply capacity building. Key to that is reducing the red tape of permits needed by power plant developers. With his sponsorship, President Duterte signed into law Executive Order 30 that mandated that government agencies must act on applications of approvals of projects of national significance within 30 days. Even the controversial 1,200mw Atimonan One project got a certification. EO30 and the CEPNS mechanisms would help mitigate the biggest stumbling blocks in getting critical power projects finished which are local and government approvals and endorsements.

Already many critical power projects all over the country are moving forward faster to alleviate power supply in their areas. Unless they have problems with complying with the CSP rules.

Secretary Cusi’s EO30 and EPNS vision will benefit power projects in the future as we try to catch up in our capacity building.  Thank you Sir. And thank you President Duterte.

c.) Curbing abuse in missionary subsidies

Another thing that Secretary Al Cusi had noticed that past Secretary’s did not pay attention to is the multi-billion rise in missionary subsidies in the off-grid areas.  These are passed on to the consumers.  When the government owned Napocor applied to increase the generation charge to the poor islands in the off-grid islands by P3 per kwh (Can you imagine socking missionary areas with a P8.50 per kwh generation charge compared to P5.50 in Manila?) Secretary Cusi ordered NPC to stop it and instead to look for ways to save the P1 billion by improving efficiency and eliminating waste in generation costs where NPC’s cost had risen by P3.5 billion only in two years from 2016 to 2018.

On behalf of the electric consumers in the off-grid areas, we thank you sir.

MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph

Meralco Style CSP Only Complying with the Ritual of CSP but Betraying the Spirit of the Supreme Court Decision

David Celestra Tan, MSK
22 September 2019

Everyday since last week we, the Meralco consumers, are being bombarded with Meralco’s mind-conditioning proclamations that its CSP have been successful. That the public will save P13 billion in the next 10 years. And that their “Third Party Bid and Award Committee” did a great job.

After the first avalanche of news reports on Meralco’s “successful CSP” came the Second wave of columnists articles singing the same tune of successful CSPs and P14 billion in savings, complete with accolades to DOE for its CSP guideline DC2018-02-0003. (wink, wink!)

Meralco and their drumbeaters claim in the 1,700 total contracts to start in December 2019, a P14 billion savings over the 10 year term at 0.41 per kwh based on its average generation rate as of September of P5.88 per kwh VAT inclusive. This is quite impressive if true since Meralco had already been claiming that in the last 5 months its rate had been reduced a total of P1.52 per kwh.

In a press release titled “Partnership for power consumers gain” new Meralco President Ray Espinosa boasted “the resulting prices from the CSP (500mw) are significantly lower than the average generation cost today and are expected to save consumers Php 4.4 billion a year for the next 5 years. (that’s P22 billion according to my P400 Casio calculator!) In the article, they quoted DOE EPIMB Director Mario Marasigan saying “indeed the winners for the activity are actually the Meralco consumers”. Marasigan also expressed optimism that the success of the Meralco CSPs will be replicated to subsequent biddings”.

Should we pray that they both turn prophetic?

Badges of Rigged Biddings 

We would like to believe you sirs! But there are badges of rigged biddings all over these CSP exercises.  And no amount of high decibel positive noise can truly drown out the truth.

Let us look at what are evident.

Meralco’s supposedly successful CSP’s were undertaken by a TPBAC composed of Meralco employees and a couple of handpicked outsiders. (How can that be impartial?).  It is no wonder they allowed only one week for bidders to buy documents and 40 days to do due diligence and prepare a bid. Yes even for the 1,200mw greenfield project that will not be due for delivery until 2024. Potential bidders composed of companies owned by the same groups were publicized to be interested only to back out eventually.

Meralco appear to be exploiting the exigency of immediate power supplies (aggregates of 1,200mw baseload for 10 years and 500mw mid-merit)  that can come only from existing (or brownfield) power plants to evidently camouflage the jewel of the charade which is a negotiated bid for their 1,200mw Atimonan One project.  By conditioning the mind of the consumers that the Meralco style CSP were successful, we would subliminally accept the eventual negotiation of the Atimonan One contract under the same DC2018-02-0003 rules that provided for failed biddings. Strategically let us not be surprised if Atimonan would also set the precedent or guide their game plan for the six remaining midnight PSA’s.

Revisiting the Spirit of the Supreme Court decision G.R. No. 227670 Promulgated May 3, 2019.

The Supreme Court said “Competitive public bidding is essential since the power cost purchased by distribution utilities is entirely passed on to consumers, along with other operating expenses of distribution utilities. Competitive public bidding is the most efficient, transparent, and effective guarantee that there will be no price gouging by distribution “(page 2)

“Going through competitive public bidding as prescribed in the 2015 DOE Circular is the only way to ensure a transparent and reasonable cost of electricity to consumers”

“Obviously, the rationale behind CSP -to ensure transparency in the purchase by DUs of bulk power supply so as to provide the consuming public affordable electricity rates –acquires greater force and urgency when the DU or its parent company holds a significant equity interest in the bulk power supplierSuch a parent-subsidiary relationship, or even a significant equity interest in the bulk power supplier, does not lend itself to fair and arms length transactions between the DU and the bulk power supplier. “(page 29)

The 2015 DOE Circular mandated that DUs, including electric cooperatives, obtain their PSAs through CSP. Section 1 of the 2015 DOE Circular states the principles behind CSP:

Section 1. General Principles. Consistent with its mandate, the DOE recognizes that Competitive Selection Process (CSP) in the procurement of PSAs by the DUs ensures security and certainty of electricity prices of electric power to end-users in the long-term. Towards this end, all CSPs undertaken by the DUs shall be guided by the following principles:

(a) Increase the transparency needed in the procurement process to reduce risks;

(b) Promote and instill competition in the procurement and supply of electric power to all end-users;

(c) Ascertain least-cost outcomes that are unlikely to be challenged in the future as the political and institutional scenarios should change; and

( d) Protect the interest of the general public. (Boldfacing added)

In sum, the raison d’etre of CSP is to ensure transparency and competition in the procurement of power supply by DUs so as to provide the least-cost

Section 19, Article XII of the 1987 Constitution provides: “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”

The State grants electricity distribution utilities, through legislative franchises, a regulated monopoly within their respective franchise areas. Competitors are legally barred within the franchise areas of distribution utilities. Facing no competition, distribution utilities can easily dictate the price of electricity that they charge consumers. To protect the consuming public from exorbitant or unconscionable charges by distribution utilities, the State regulates the acquisition cost of electricity that distribution utilities can pass on to consumers.

As part of its regulation of this monopoly, the State requires distribution utilities to subject to competitive public bidding their purchases of electricity from power generating companies. Competitive public bidding is essential since the power cost purchased by distribution utilities is entirely passed on to consumers, along with other operating expenses of distribution utilities. Competitive public bidding is the most efficient, transparent, and effective guarantee that there will be no price gouging by distribution (page 2)

Indisputably, the use of electricity bears a vital social function. The State, in requiring competitive public bidding in the purchase of power by distribution utilities, has exercised its constitutional “duty x x x to intervene when the common good so demands. ” (Page 3)

Meralco Style CSP

As a ritual Meralco’s CSP show is a success complete with the competitive pageantry. There were 23 “interested” bidders. And claims of consumers savings of anywhere from P9.64 billion to P14 billion for the two packages totaling 1,700mw and now P22 billion only for the 500mw mid-merit contracts over 5 years. Meralco could not make up their mind in how much they would claim to be the consumer savings.

It is hard to grant them the benefit of the doubt that Meralco’s CSP’s are truly complying with the spirit and actual exhortations of the Supreme Court.

1. The CSP must be transparent and truly competitive “to effectively guarantee that there will be no price gouging of consumers”.

How can it be when the bidding is being administered by a misnomered Third Party Bid and Award Committee (TPBAC) that is composed of majority Meralco officials and handpicked outsiders. The TPBAC Technical Working groups who presumably wrote the specifications and TOR are all Meralco people. You need to pay P6 million just to see the complete bid documents.

2. Promote and Instill Competition

a. How can true competition be promoted when the TPBAC allowed bidders only 7 days to decide whether to take a look at the bid documents and spend a non-refundable P6 million? How will it encourage other bidders if you are allowed only 40 days to prepare a bid? I mean even if you have an existing power plant, it will take you more than 7 days to spend millions in corporate funds just to see the details? And it will take you more than 40 days to prepare an honest to goodness competitive bid.

b. Even if such short days can be justified for the 1,700mw that is for delivery in December 2019, how can such short 47 days be justified for a 1,200mw greenfield project that is not due for delivery until 2024 be justified? I mean it takes only 2.5 to 3 years to build a 1,200mw coal power plant. They easily could have allowed 120 to 150 days to prepare a bid if they really meant to comply with the Supreme Court’s order for a truly transparent and competitive bidding.

c. As we can expect, in the 3rd package for 1,200mw of greenfield base-load contract that specified “super critical high efficiency, low emission” coal plant technology, out of the four (4) potential bidders, 2 were San Miguel companies, 1 is Meralco PowerGen’s Atimonan One, and 1 is First Gen. The two San Miguel companies withdrew from the bidding and First Gen did not show up. And is it a surprise that only Atimonan One submitted the lone bid and the bidding is declared a failure.  As provided for in DOE CSP Guideline DC2018-02-0003, one more such failure and the contract will automatically be negotiated (legally this time!) with the lone bidder.  Exactly what the Supreme Court admonish against.

3. No Combinations in restraint of trade or unfair competition shall be allowed “Obviously, the rationale behind CSP -to ensure transparency in the purchase by DUs of bulk power supply so as to provide the consuming public affordable electricity rates –acquires greater force and urgency when the DU or its parent company holds a significant equity interest in the bulk power supplierSuch a parent-subsidiary relationship, or even a significant equity interest in the bulk power supplier, does not lend itself to fair and arms length transactions between the DU and the bulk power supplier. “(page 29)

Have the ERC and DOE allowed the evident combination in restraint of trade and unfair competition? Could they have done anything to protect the public interest given that DC2018-02-0003 under Section 7 relegated them to be “Observers” who cannot participate in deliberations. (In kanto chess community, they are called “miron”)

4. Are the Meralco Consumers really saving? Let us look at the numbers.

a. For the 1,200mw power supplies to start in December 2019, (Why could not have been March 2020 to give time for more bidders?) the winning bids were Phinma of Ayala for 200mw at P4.8849 per kwh, San Miguel Energy for 330mw at P4.9299 per kwh, and South Premiere (Ilijan) of San Miguel for 670mw at P4.93 per kwh (p0.0001 higher than sister company SMEC). It is reported that the reserve price set by Meralco’s TPBAC was P5.3694 per kwh.

b. For the 500mw mid-merit supply for 5 years, First Gen won with 5.3989 per kwh for 100mw, Phinma of Ayala with P5.5858 per kwh for 110mw, and South Premiere of San Miguel with P5.7527 per kwh for 290mw.

(Pwede pong magtanong, bakit po kaya alam ni San Miguel na 290mw ang balansya at si First Gen at Phinma together will be only 210mw? At the 1,200mw bid, na 670mw na lang a balansya?)

c. Meralco, in their publicity, has been claiming a total of P35 billion (P22 billion from the 500mw and P13 billion from the 1,200mw). These they said are based on its average generation rate of P5.88 per kwh.

a. This we believe is misleading. Meralco’s average of P5.88 per kwh apparently includes the high WESM rates for the period of May to July.

b. Meralco’s true average from bilateral contracts, as they should be comparing on apples to apples, are only P4.75 in July, P4.82 in June, and P4.94 in May.

d. It appears from these numbers on record that the winning bid prices in the highly heralded successful CSP of Meralco were about the same or even higher than the current prices of the same suppliers. Let us remember that the current prices were a result of negotiated prices and not CSP. Now in a supposed CSP, the prices were the same or higher?

e. South Premiere’s prices were 4.7842 in May, 4.8682 in June, and 4.8489 in July and 5.3256 in August. Those were significantly lower than its winning bid of P5.7527. SMEC Sual had been 5.1555 in May, 5.0718 in June, and 5.0377 in July. It curiously jumped to P5.8245 per kwh in August. Their winning bid was P4.9299 per kwh.

f. How much are the consumers really saving?

We will not know for sure until we see the full details in the pricing indices and fuel base rates used and other terms like minimum off-take, guaranteed capacity payments, and downtime with pay allowances.For now we are not convinced about Meralco’s grandiose claim of a P35 billion savings for the consumers. We cannot see it in the numbers.

5. Betrayal of the Supreme Court Lessons

So far while Meralco seems to be only complying with the ritual of CSP as prescribed by the Supreme Court, they appear to be betraying the spirit of the Supreme Court’s exhortation for true and transparent CSP to prevent consumers from being gouged.

Tayo talagang mga Pinoy. Ito talagang Meralco.

 

MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph