[Press Release] Electric consumers with CSO protest in front of ERC and Meralco main office to expose Meralco’s anomalous ‘sweetheart’ deals over its PSA applications

Electric consumers with civil society organizations protest infront of Energy Regulatory Commission (ERC) and Meralco main office to expose Meralco’s anomalous ‘sweetheart’ deals over its power supply agreement (PSA) applications.

Photo by FDC

Led by the members of the Power for People Coalition (P4P), Sanlakas, the Freedom from Debt Coalition (FDC), the Philippine Movement for Climate Justice (PMCJ), and the Center for Energy, Ecology, and Development blasted Meralco for virtually “dealing with itself” by entering into PSAs with companies which it has large shares of.

“With a contribution this big, this company must have strengthened its commitment to be faithful to its consumers in solving our energy crisis. However, it seems that they have been fooling behind our backs together with their ‘sweethearts’,” said Butch Junia of the Power for People Coalition.

Meralco’s ‘sweetheart’ Companies

The current Electric Power Industry Reform Act of 2001 (EPIRA) allows distribution utility to contract with affiliated generation companies at 50% of its total demand. However, based on Meralco’s 2016 Annual Report, its PSA partners are actually their subsidiaries, associates and/or joint venture partners.

Thru MGen or MERALCO PowerGen Corp., Meralco’s fully owned subsidiary, has major investments in Atimonan One Energy (A1E); 50% in St. Raphael Power Generation Corporation (SRPGC); 49% in Mariveles Power Generation Corporation (MPGC); 47% in Redondo Peninsula Energy Inc (RPE); and 14% in Panay Energy Development Corporation (PEDC).

“This is nothing but a clear connivance between Meralco and the said generation companies—a deal made out of mutual benefits and equal exchange of favors, just like how ‘sweethearts’ do,” said Erwin Puhawan of the Freedom from Debt Coalition (FDC). “If the PSAs would push through, Meralco would have freedom to exercise influence over the cost of both the generation and the distribution of electricity,” Puhawan claims.

Meralco’s continued betrayal to the people

“What is clear is that consumers will end up carrying the cost of these incestuous deals, with Meralco profiting from both ends of the power sector,” said Gerry Arances of the Center for Energy, Ecology, and Development. “This undermines any semblance of commitment by the government to increase energy access in the Philippines, and will only reinforce the electricity oligarchy in place in the country’s energy sector,” Arances said.

Out of the total 592 PSA cases reported by ERC as of February 2017, 30 cases were Meralco applications giving them the biggest amount of shares.Meralco has responded negatively to these accusations saying they are being singled out from all the companies who submitted their PSA applications; which was then immediately answered by the protesters claiming that Meralco is playing the victim card.

“We are not singling them out. It is true that there are 90 applications submitted and only 9 of them are from Meralco but we should take note that in terms of demand it is 3,551MW out of a total of 4,500MW, making it 78% of total demand. That means that 7% of total PSAs own 78% of total demand,” said Sanlakas Secretary General Atty. Aaron Pedrosa.

Groups also added that it is very unusual and worrisome that this had gone unnoticed with ERC seemingly unconcerned. “We urge the ERC to slam the PSAs and break up this abusive relationship between Meralco and consumers,” Pedrosa said. “We cannot have a relationship based on lies,” he added.

Meanwhile, PMCJ National Coordinator Ian Rivera said that these partnerships can make or break our environment’s future. “These sweetheart deals are mapped-out destruction of our environment bringing us 5 steps backwards in achieving sufficient, affordable and clean energy,” Rivera added.



GERRY ARANCES, CEED: 09778406098
IAN RIVERA, PMCJ: 09174746178
ERWIN PUHAWAN, FDC: 09328726174

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