Competition benefits consumers

A victory for consumers – that was what the public achieved when the Taguig Regional Trial Court (RTC) dismissed the injunction plea filed by the Malampaya consortium against Meralco’s Competitive Selection Process or CSP. This ruling eventually paved the way for the bidding process to resume, leading to long-term benefits for electricity consumers.

As expected, the turnout of Meralco’s CSP defied critics as the utility company successfully secured competitive offers – a testament to the effectiveness of the bidding process in securing the lowest possible rate.

After all, competition is always beneficial, as it compels businesses to deliver their best in terms of both price and quality. And who ultimately wins? The consumers.

In the case of Meralco CSP, the winning bid for the 600MW supply came from Masinloc Power, which offered a rate of P5.60 per kWh for 500 MW of the energy requirement. GNPower Dinginin provided the rate of P5.7392 per kWh for the remaining 100 MW. Both rates already include value-added tax (VAT) and line rental fees.

These are highly competitive bids, especially considering that Meralco revealed these are even lower than current billings from its supplier First Gas, for the Sta. Rita and San Lorenzo plants, which are in the P7 per kWh range (excluding VAT). The rate difference, of course, translates directly to consumer savings.

This is palpable proof that the CSP is effective in terms of advancing and protecting the interest of consumers. These winning bids are now subject to the evaluation of the Energy Regulatory Commission (ERC) and hopefully, will be implemented in a timely manner. I would like to believe that the ERC is aligned with consumers in the preference for sufficient and stable electricity at fixed cost.

Unnecessary criticism and obstructions should not overshadow the long-term benefits of the CSP to consumers. These are not only unwarranted; they also endanger the country’s energy security goals, especially amidst the already fragile power supply situation.

By its very nature, the government-mandated CSP is designed to protect and promote consumer interest, in order to ensure that the much-needed power supply is procured at the least cost possible.

Time and again, the CSP has been proven to be an effective mechanism to guarantee stable power supply without the risk of fluctuating prices. With secure contracts in place, exposure to the electricity spot market is minimized, shielding consumers from highly volatile pricing.

There is current focus on the need to curb prices of basic commodities. In the recent Pulse Asia survey, 72 percent of Filipinos feel controlling inflation should be immediately addressed by the administration. In the context of this current situation, the news on the possibility of lower electricity rates is a welcome development. The CSP not only shields consumers from price volatility but also ensures the quality of service we receive.

From an economic standpoint, the CSP is a key pillar in advancing energy security, consequently sustaining and accelerating the Philippines’ growth trajectory. The CSP ensures the availability of a reliable power supply at fixed, affordable rates, eventually attracting investments and fostering the boost of new business developments.

This is critical for the Meralco service area, majority of which are considered as the country’s economic and industrial hubs. Metro Manila alone, for example, accounts for 36 percent of the country’s gross domestic product, which means that affordable and stable electricity supply is a requirement.

It is important to emphasize that, given the government’s economic growth targets, energy security is a crucial factor that must not be compromised. The Philippines needs a stable and sufficient power supply at affordable rates to accelerate economic growth and stimulate greater economic activity.

President Marcos himself has highlighted energy security as a priority in his administration’s socioeconomic agenda, underscoring the importance of a reliable power supply.

As we move forward, it is essential to recognize that efforts to obstruct the CSP only harm consumers and threaten economic progress. The CSP is a functioning process that serves the interests of consumers and supports economic growth.