Consumers, scientists and activists held a protest at Meralco’s generation office at the Rockwell Business Center in Pasig on October 3 to demand Meralco to abandon the seven “dirty, midnight deals” on power supply agreements (PSAs) between the company and its affiliated power generation companies.

Consumers’ alliance People Opposed to unWarranted Electricity Rates (POWER), scientists group AGHAM Advocates of Science and Technology for the People and environmental group Kalikasan People’s Network for the Environment (KALIKASAN PNE) and groups Bayan Muna, Gabriela, Kalipunang Damayang Mahihirap  trooped to Meralco to expose the company’s stake in the lucrative PSAs.

Groups demanded teh cancellation of seven power supply agreements of Meralco and its affiliated power generating companies. Photo from Agham.
Groups demanded teh cancellation of seven power supply agreements of Meralco and its affiliated power generating companies. Photo from Agham.

“Meralco’s abuse of power is at its peak. With its significant shares in the generation companies, Meralco practically owns and controls the affiliated power generation companies in question. This extent of control in the generation up to the distribution of power will worsen corporate monopoly of the entire supply chain of the energy industry,” said Finesa Cosico, AGHAM Secretary-General, in a statement.

AGHAM said that P 1.9 trillion worth of ‘midnight deals’ for seven new power plants of Meralco and its affiliated power generating companies would be passed on to consumers once approved by the Energy Regulatory Commission (ERC).

Last week, the ERC granted a provisional authority to operate to four out of the seven companies: the Redondo Peninsula Energy, Inc. in Subic, Zambales, St. Raphael Power Generation Corp. in Calaca, Batangas, Atimonan One Energy, Inc. in Atimonan, Quezon, and Panay Energy Development Corp. in La Paz, Iloillo.

Included in the companies yet to be approved are Central Luzon Premiere Power Corp. in Pagbilao, Quezon, Global Luzon Energy Development Corp. in Brgy. Luna, La Union, and Mariveles Power Generation Corp. in Mariveles, Bataan. As reported by POWER, ERC Commissioner Josefina Asirit said the three “have not even been scheduled for a hearing yet because of the lack Environmental Compliance Certificate.”

“The power (purchasing) agreement between the owners of these plants and MERALCO are ‘midnight deals’ as no bidding occurred. MERALCO owner Manny Pangilinan has significant stake ownership on these power producers,” commented KALIKASAN PNE National Coordinator Clemente Bautista in an interview with Manila Today.

Midnight deal  

“The midnight deals are the product of connivance between Meralco and its affiliate power generation companies. This was possible under the Electric Power Industry Reform Act’s (EPIRA) provision on cross ownership which allows private entities to own both generation and distribution utilities, resulting to one or few companies dominating the entire energy industry,” said Cosico.

In June, Bayan Muna Representative Carlos Zarate questioned the approval of the P 1.7 transmission line for a power plant of the Atimonan One Energy, Inc., supposing also that six other PSAs with six other generation companies Meralco allegedly controls may have been also approved. Zarate alleged that these seven PSAs awarded without bidding to the generation companies may force Meralco customers to pay P91 billion in generation charges yearly.

Zarate said, as per his group’s computations, Meralco customers may be forced to pay almost P2 trillion in generation charges, excluding distribution and transmission line charges and other costs through the 20 to 21-year duration of the contracts.

“The seven coal plants set to be built under the agreements will tie our hands to a single pollutive source of energy for 20 years. More than this, it will also result to higher electricity rates in the long run as the price of coal continues to surge upwards,” said Cosico.

Dirty deal

KALIKASAN PNE said the MERALCO coal projects amount to an estimated 9.7 million metric tons of annual coal consumption, and equivalent to 3,551 megawatts of annual power production. This is estimated to produce an annual output of 739,791.3 tons of coal ash, 1.1 million tons of sludge waste, and 20.7 million tons of carbon dioxide.

Kalikasan extrapolated the figures from the Department of Energy data. The projections were based on the power that would be produced by the seven power plants and projected coal consumption and were also based on the study of the Union of Concerned Scientists.

“Coal power is one of the dirtiest source of electricity. It is one of the major contributors of global carbon emission. Studies show that coal power negatively impacts peoples health and environment,” said Bautista.

KALIKASAN PNE said in its October 3 statement that MERALCO’s midnight deals would lock-in the country to dirty, climate change-inducing energy.

The group described it as ‘the single biggest coal coup in the power industry in recent years.’

“Imagine all that waste finding its way into our drinking water, crops, homes, and the very air we breathe. Imagine stockpiles of pulverized coal dumped on open-air expanses, with winds dispersing the dangerous particulates into the ecosystems and communities adjacent to these new coal power plants about to be locked in,” also said the statement.

Alternative to coal

Apart from the PSAs for the establishment of coal-fired power plants approved so far this year during the administration of President Rodrigo Duterte, the Benigno Aquino III administration was noted to have approved 25 coal-fired power plants in 2015.

On why the country remain dependent on coal, Bautista said, “This is part of the imposition of financial institutions like World Bank and Asian Development Bank to transfer their surplus and dirty technology in third world countries like the Philippines. As coal technology is becoming obsolete, industrialized countries like US and China transfer their coal power technologies and products.”

Bautista said the establishment and operation of coal power plants would also ensure that the Philippines will remain dependent on expensive, imported dirty coal.

Bautista said the country has so much indigenous and renewable energy resources, being the second biggest producer of geothermal energy in the world and having so much hydro and solar power potential.

“Only if the government can harness these resources through establishing a power industry that is controlled by the state. A basic requirement for this is first to reverse the energy privatization and deregulation policy of the government which is stipulated under the EPIRA. Second, the development of the energy industry should be under the context of pursuing national industrialization,” said Bautista.

Agham, likewise, called on the government to craft an alternative energy policy that that espouses a pro-people, pro-environment nationalized energy industry geared towards the needs of the country for national development.

The group demanded as well for the cancellation of the seven agreements with Meralco and its power generation companies and the abolition of EPIRA.

Political will for renewable energy

However, Duterte, as with the previous president Aquino, held the view that coal power is necessary.

As presidential candidate, Duterte said ‘there is nothing wrong with coal’ and as president he said ‘green energy is good but we need coal.’

“Duterte has a long record of supporting coal power plants. He supported the establishment of Aboitiz coal plant in Davao city when he was still a mayor. His best friend Department of Finance Secretary Dominguez is part owner of coal power plants in Mindanao namely the 200-megawatt Sarangani Coal Power Plant. We believe Du30 benefits from these power projects,” said Bautista.

In September 2016, Duterte inaugurated the Filinvest Development Corp. Misamis Power Corporation’s 405-megawatt coal-fired power plant in Villanueva, Misamis Oriental and it was subsequently reported through media that the power plant contributed to the stabilization of the energy supply in Mindanao.

“Any power plant that producing  electricity will definitely add to the current power supply. Whether it will stabilize the energy supply in Mindanao depends if its enough to provide the current demand. At the short term, coal power plant is currently is the cheapest, not considering its health and environmental cost, power source for corporations to set up. It has also the fastest return of investment compared to hydro, geothermal, wind, and even solar power,” commented Bautista.

Bautista also noted that the current Department of Energy Secretary Alfonso Cusi is a former employee of Aboitiz Corp., reportedly worked his way up from Assistant Comptroller in 1973 to Senior Vice President and Director in 1990. Aboitiz Corp. being one of the major power players and owners of coal power plants in the Philippines.

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