Meralco Should be Honest with the Consumers, Regulators, and Government

David Celestra Tan, MSK
23 November 2020

Your organization MSK, together with Bayan Muna, had asked Meralco to explain why the generation rate of Quezon Power Ltd had skyrocketed to an average of P6.73 per kwh, when all the other coal power suppliers to Meralco averaged only P4.20 per kwh so far this year 2020.
The difference has been P4.05 Billion on the generation charges that were passed on to the consumers up to September this year.

Instead of directly addressing the anomalous rate that it has been paying Quezon Power that is owned by its partner, EGAT of Thailand, Meralco is trying to divert the issue and point out that their total rate to the consumers has gone down by P1 per kwh or 17% this year. This they said was due to the “newly implemented power supply agreements which took effect last year” according to Meralco spokesman Joe Zaldarriaga.

What Meralco is unable to explain is that while its generation rate dropped 17%, coal prices, the main fuel of their generators, dropped 28% during the first 9 months of the year from $69.66 per ton in January to $50.34 per ton in August. On top of that, the WESM from where Meralco buys 15% of their power, dropped 193% from P8.49 per kwh in January to only P2.421 per kwh in August. Meralco’s generation rate should have been much lower than 17%. It should be mentioned also that Meralco’s claimed lower rates are partly due to the refunds ordered by the ERC.

The main reason was Meralco has been paying higher rates, apparently without bothering to check why, to Quezon Power in Mauban an average rate for the period January to September 2020 of P6.73 per kwh. It is 51% higher than AC Energy at P4.55, 66% higher than San Miguels Sual at P4.051, an astonishing 82% higher than Therma Power in Pagbilao at P3.6549 per kwh. QPL is 66% higher than the new 460mw San Buenaventura coal plant at P4.0533 per kwh.

Meralco should be passing on to the consumers the cost benefits of 28% lower coal prices and 193% lower WESM prices.

In their evident attempt to avoid explaining why Quezon Power ‘s rate had skyrocketed 52% this year, Meralco as usual gives their standard alibi that their rates were approved by the ERC and that consumer groups participated in the rate hearing 20 years ago.

We hope that Meralco can give the direct and honest answers in a Congressional hearing being sought by Bayan Muna party-list representatives Carlos Zarate, Ferdinand Gaite, and Eufemia Cullamat.

We are looking forward to knowing the truth.

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