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Energy Research Institution:

Meralco, coal companies pushing high-cost, dirty electricity this summer

Press Release
March 21, 2018

QUEZON CITY – According to energy research institution Center for Energy, Ecology, and Development (CEED), higher consumer demand for power during the summer is now being utilized by Meralco and its affiliate coal generation companies to push for the approval of their power supply agreements sourced from coal (coal PSAs). Just three months ago, the Ombudsman ordered the suspension of four Energy Regulatory Commission (ERC) Commissioners over the anomalous coal PSAs.

CEED Executive Director Gerry Arances called out energy giants Meralco and Redondo Peninsula for bemoaning the delay in the approval of their coal PSAs but overlooking the interests of consumers, who opposed the said approval.

“Meralco and its affiliate coal companies have pushed for the approval and operation of their coal-fired power plants under the guise of protecting consumers from power outages,” Arances noted.

“However, these coal PSAs are being contested by the consumers themselves, with the support of environment and grassroot organizations, for spelling out higher electricity prices and a dirtier environment for the next twenty years,” said Arances.

CEED Legal and Policy Officer Atty. Avril De Torres also lamented the Temporary Restraining Order (TRO) issued by the Court of Appeals against the Ombudsman’s suspension order, in order to prevent public service disruption.

“Public service disruption should not be used as a justification to stay the Ombudsman’s suspension order and to approve the anomalous coal PSAs. Our remedies should be to immediately appoint acting commissioners, and to prioritize the approval of cleaner and cheaper energy. This is how we ensure that we are promoting public service and consumer interest over the interests of coal companies,” said De Torres.

According to Arances, coal spells out higher electricity prices since coal is already more expensive than wind and solar energy. Under the seven coal PSAs, the average rate of coal electricity is PHP 3.65/kWh, meanwhile wind and solar are at a lower rate of P3.50/kWh and P2.99/kWh, respectively.

Arances stated that what is also usually left out in Meralco and other coal giants’ pressure for more coal is the global transition away from coal, which puts facilities like coal-fired power plants at risk of becoming stranded assets.

He cited a study conducted by the Institute for Energy Economics and Financial Analysis (IEEFA) and the Institute for Climate and Sustainable Cities (ICSC) which showed that ‘stranded coal assets’ are a growing material risk that is inevitable in the Philippines.

Arances said that according to the IEEFA and ICSC study, trends in the coal-fired electricity generation sector, such as the over-build of coal-fired power plants, ‘may leave ratepayers at risk of having to pay above-market prices.’

“If Meralco and its coal affiliates have their way in the approval and operation of their coal plants, Philippine electricity consumers are to be locked into not only twenty more years of dirty and steadily increasing electricity prices, but also into paying for stranded asset costs of these obsolete coal plants,” Arances claimed.

“Necessarily, this will also prevent consumers from accessing cleaner and cheaper electricity from sources like renewable energy,” he concluded.

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