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Brix Lelis - The Philippine Star
April 28, 2025 | 12:00am
Clash of (Energy) titans
MANILA, Philippines — Metro Manila’s heat index hit as high as 42 degrees Celsius last Thursday, but tensions inside the air-conditioned The Fifth at Rockwell in Makati made summer even hotter.
“You can relax,” Energy Secretary Raphael Lotilla said before delivering his speech at the Giga Summit 2025: The Fusion of Power and Intelligence, hosted by Meralco Power Academy, the energy education arm of power giant Manila Electric Co. (Meralco).
While the audience chuckled, reporters sitting at the back sensed a bombshell was about to drop.
“Despite its size and sourcing… Meralco does not have the cheapest power rates when compared with other DUs (distribution utilities) and ECs (electric cooperatives),” Lotilla said in his remarks.
Meralco, which serves at least eight million customers within Metro Manila and nearby provinces, should further step up and be the “very best” it can be, he said.
MVP’s commitment
Tycoon Manuel V. Pangilinan was quick to throw a subtle clapback.
“I hope we are able to bring down power prices, at least on the distribution side. We don’t make money on the generation side, but we get the brunt of the criticisms,” said Pangilinan, who chairs Meralco.
He assured stakeholders that Meralco remains committed to lowering electricity rates.
This month, Meralco rates increased by P0.72 per kilowatt-hour (kWh) due to higher generation and transmission charges, which are paid to power suppliers and the national grid operator.
The distribution charge, the only portion of the power bill that goes to Meralco, has not moved since the reduction of P0.036 per kWh in August 2022.
“It is in our interest to bring power rates down. We are looking for ways to do that,” Pangilinan said.
Where it started
The recent verbal tussle between Meralco and the Department of Energy (DOE) felt like a fiery sequel to their Holy Week run-in.
On Holy Monday, the DOE conducted a surprise virtual press conference, taking aim at Meralco’s competitive selection process (CSP).
The briefing, led by DOE Undersecretary Felix William Fuentebella and Assistant Secretary Mario Marasigan, turned the spotlight on a CSP, which involves Meralco’s procurement of 1,200 megawatts (MW) of supply from a gas-fired facility in Batangas.
However, not all units of Excellent Energy Resources Inc. (EERI) are currently operational. This, Marasigan claimed, has exerted pressure on the electricity market and resulted in higher power costs.
Meralco fires back
Armed with a fresh franchise extension, Meralco reaffirmed its compliance with the CSP guidelines and issued clarifications regarding the remarks made by Marasigan.
“It is lamentable that a high-ranking DOE official speaks out of turn and makes statements that are false and misleading,” Meralco said in a statement on April 16.
The higher spot market prices, Meralco said, were largely due to the “simultaneous outages of several power plants” and not the delayed implementation of its supply agreement with EERI.
“The issues in EERI’s testing and commissioning would not have had much significant effect on the grid’s reliability had there been other new baseload power plants that were already built and online,” it said.
It also argued that the delayed approval by the Energy Regulatory Commission on the resulting supply contracts significantly contributed to supply deficiency and increased generation costs.
The company reiterated that its CSP and the resulting PSAs complied with all government policies for the procurement of power for its captive customers.
Collateral damage?
Amid the tensions, the DOE suddenly put on hold the previous approval it gave to Meralco PowerGen Corp. (MGen)’s 1,200-MW Atimonan coal plant in Quezon.
Earlier this month, the DOE informed MGen, the power generation unit of Meralco, that the Atimonan plant was exempt from the existing moratorium on new coal facilities.
The DOE, however, backpedaled and withdrew its confirmation last week, saying the Atimonan coal plant is subject to “further review.”
“I’m hoping that we can still get this review sooner rather than later,” MGen president and CEO Emmanuel Rubio said in a chance interview last Friday. “I don’t have the details yet of what aspect of the project will be reviewed.”
Nothing is certain about where this popcorn-worthy drama is headed. But one thing’s for sure: the heat is on and power consumers will keep sweating through the summer heat.
