Fixed rates for new power supply deals pushed

MANILA, Philippines — Energy consumer advocacy group Power for People Coalition (P4P) is pushing for fixed rates for all new power supply agreements (PSAs), instead of passing on increased costs to end users.

“One thing is clear, fixed rate PSAs shield consumers from higher electricity rates,” P4P convenor Gerry Arances said in a statement.

“Therefore, all new PSAs, perhaps even emergency PSAs, should have fixed rates. In this setup, corporations that have the money, knowledge and capability to protect themselves from fluctuating energy prices carry the risk and burden of price increases and not consumers,” Arances said.

P4P had earlier opposed San Miguel Corp. (SMC)’s “insistence on escaping its PSA with Meralco, seeking to pass on its losses to consumers.”

A joint rate hike petition of SMC power units and Meralco for a temporary adjustment in the prices of their fixed-rate PSAs signed in 2019 to recover fuel costs amid the unprecedented spike in fuel prices was denied by the Energy Regulatory Commission (ERC) in an order promulgated on Sept. 29 last year.

Aside from seeking fixed rates for all new PSAs, P4P is likewise advocating for a greater role for consumers in the competitive selection process (CSP), which determines the PSA secured by distribution utilities.

The CSP policy was issued by the Department of Energy (DOE) with the aim of speeding up power supply procurement.

It is mandated by government to get the least cost power to consumers.

The DOE earlier said among its key priorities for this year is to reassess previous policy issuances and the promulgation of a more refined CSP policy to address the delays and improve the slow pace of distribution utilities’ compliance on competitive power supply contracting.

“As such, the necessary power supply contracting mechanisms will be in place, enhancing the efficiency and effectiveness of the policy,” the agency said.

“Similarly, the department will swiftly push to strengthen its implementation to institutionalize transparency and good governance in the awarding of power supply contracts,” it said.

The ERC commenced in November last year a nationwide caravan to review PSAs to address the high cost of electricity in the country.

The PSA caravan is aimed at engaging private distribution utilities and electric cooperatives in discussions and finding solutions to address the increasing electricity rates in various parts of the country.

Meanwhile, the DOE yesterday said it continues to encourage power sector stakeholders to work together to explore all measures that could help consumers, particularly in Luzon, by ensuring adequate supply of power during the forthcoming summer months.

“The DOE continues to call on everyone concerned to cooperate in the common effort to assist the consuming public,” the agency said.