A Consumer group on Sunday warned that the $3 billion deal between the country’s three biggest energy firms to level up the use of natural gas by power plants will soon be a threat that would raise electricity rates by monopolizing the liquefied natural gas (LNG) industry.
The consumer group United Filipino Consumers and Commuters (UFCC), through its president Rodolfo Javellana Jr., said the joining of forces by the three major companies—San Miguel Global Power Holdings Corp, Meralco PowerGen Corp and Aboitiz Power Corp.—to operate an LNG facility in Batangas province was aimed at maximizing profits and tightening their grip on the LNG industry.
“What transpired was these oligarch companies consolidated to maintain their monopoly in the power industry,” Javellana said.
“In this consolidation, they aim to maximize the profits for their respective corporations," he added.
Javellana said the consolidation effectively ensured that an estimated 8 million consumers, relying on the services of these corporations, will bear the brunt of repeated rate increases.
“Even then, reducing electricity rates for the well-being of consumers had never been the priority of these companies,” Javellana said.
“Their primary goal as always is to ensure that their earnings are big," he said.
Eight million consumers would face higher electricity rates as a result of increased use of imported LNG, which the Batangas facility was designed for, as this fuel was more expensive.
Javellana also scored government inaction on the need to protect consumers.
“This was further worsened by the regulatory capture of government agencies that should have been acting as check and balance and defending the 8 million consumers held hostage by constant price hikes,” Javellana said.
“The public cannot hope for any redress in the future as they can only expect costlier electricity,” he noted.
Javellana earlier said that high electricity costs threaten to frustrate the economic goals of the Marcos administration.
He said investors would not find the Philippine business climate attractive because of high power costs, which are among the most expensive in the world.
He said Congress should step in and repeal or amend the Epira law, which is the root of high power costs.
