Metro Manila (CNN Philippines, August 24) — The SMC Global Power Holdings Corporation (SMCGP) expects electricity prices in Metro Manila and nearby provinces to go up by as much as 30% starting October.
The company said the scenario is inevitable if the Energy Regulatory Commission (ERC) fails to act on the company’s joint petition with Meralco for a temporary rate hike on its two power supply agreements.
SMCGP President Ramon Ang on Wednesday asked ERC for a fair and objective assessment of the hike petition.
In May, it sought a temporary increase for six months for the combined capacities supplied by its Sual Coal Plant and Ilijan Natural Gas plant to Meralco.
“We are only seeking partial adjustment in price so we can continue supplying to Meralco and minimize the impact of termination on industries and consumers, particularly those from the lower-income households who will get hit harder,” Ang said in a statement.
The temporary relief, if granted by ERC, would increase electricity prices in Luzon by only 30 centavos/kwh over a period of six months.
However, without it and with a termination of the power supply agreements, Meralco has estimated an increase of at least ₱0.80 up to ₱1.30/kwh in the price of electricity over the next three to four months, as it will have to find alternative sources that will most likely be costlier, including the Wholesale Electricity Spot Market.
If Meralco opts for an emergency power supply procurement, the increase is expected to further go up with the weakening peso and surging global fuel prices, the SMCGP stated.
The company also expects hefty price increases over the term of the contracts until 2030 if the temporary relief intended for partial cost recovery is not acted upon.
The temporary rate hike is meant to allow the Sual and Ilijan facilities to ensure their fixed-rate power supply deals are maintained for a long period and continue to mitigate the soaring cost of electricity for consumers.
It is also hoping to recover some ₱5 billion in losses.
“We just hope the ERC will not merely try to prevent a temporary increase, but will take a whole-of-industry approach,” Ang said. “No company or business can sustain operations with these unprecedented and continuing rise in costs.”
The business tycoon added, “These power plants account for 25% of the net reliable capacity of the Luzon grid. They are a major part of the country’s already fragile power supply. We ask that in this time of extraordinary circumstance and difficulty, please, let’s not cripple them.”
