Consumers hail ‘historic’ ERC ruling on rate hike petition

The Power for People Coalition (P4P) on Tuesday called the decision of the Energy Regulatory Commission (ERC) on the petition to raise electricity rates “historic”, as the regulatory agency denied the bid of San Miguel Corporation (SMC) and the Manila Electric Company (Meralco) to pass on fuel costs to consumers despite a “straight price” power supply agreement (PSA).

SMC and Meralco entered into a straight price, or fixed price PSA in 2019 for the supply of electricity from the Sual coal-fired power plant and the Ilijan LNG plant. SMC, claiming losses of over ₱15 billion, made the petition to escape the fixed price clause and make consumers foot the bill for their chosen fuel, alleging that they could not have foreseen the price spikes in the world market.

“The ERC’s recent history has made consumers pessimistic about the willingness of the agency to defend consumer rights. We are glad to have been proven wrong in this case. The vigilance and solidarity with which consumers resisted this threat of higher electricity rates bore fruit with this ERC decision, and we hope this is the start of more pro-consumer outcomes in years to come,” said Gerry Arances, P4P Convenor.

P4P, which has been a consistent oppositor to the petition, warned that further moves by power companies to subvert the decision will continue to be resisted by consumers.

“Even before the release of the decision, SMC has already issued threats of cutting off the power supply to consumers. In their scenario, it would force Meralco to buy from the Wholesale Electricity Spot Market (WESM), which will again push up prices for consumers. We’ve had enough of this blackmail, and call onto the ERC and Department of Energy to hold SMC accountable for economic sabotage should it really back out of its contract obligations to provide power to consumers,” said Aaron Pedrosa, Secretary-General of Sanlakas, a member-organization of P4P.

Arances added that if SMC were to push through with its threat or appeal for reconsideration ny the ERC, they will only reveal the unreliability of power and prices from fossil fuel sources,  and must brace for continued resistance from consumers.

“For so long, fossil fuel has been preferred by energy companies like SMC to profit off to the detriment of consumers. I hope this serves as a lesson for SMC that the tides have changed, that fossil fuel power will only continue to be costly to both themselves and consumers, and that gone are the days when they could treat Filipinos like a cushion to their generation costs. Consumers deserve affordable, reliable, and sustainable energy,” said Arances.