Philippine consumer groups warned Monday that a government plan to auction natural gas power capacity could expose households nationwide to higher electricity bills by allowing generators to pass volatile fuel costs directly to consumers.
The Power for People Coalition said the Department of Energy’s planned mid-merit natural gas capacity auction would expand reliance on gas-fired power while leaving electricity users to absorb increases in fuel prices.
Under the proposed policy, generation companies would be allowed to fully pass fuel costs to consumers as pass-through charges. P4P said households would bear increases caused by geopolitical tensions, shipping delays and fluctuations in the global gas market.
The coalition raised its concerns during a rally outside the building housing the Energy Regulatory Commission, where a public consultation on the proposal was scheduled.
“Gas is the most expensive source of power generation in the Meralco franchise area – it was true before the ongoing global energy crisis, it is even truer now. This gas auction should not even be up for discussion at all if our energy agencies truly care about energy affordability, security, and sustainability,” said P4P campaigner Krishna Ariola.
Meralco is currently the only distribution utility that sources a significant portion of its electricity from gas plants, according to the coalition.
P4P said residential electricity rates in the Meralco franchise area have increased by almost P5 per kilowatt-hour since the start of the Marcos administration, a period that it said coincided with a greater share of gas plants in Meralco’s power supply contracts.
The coalition warned that the auction could encourage distribution utilities elsewhere in the country to procure more gas-fired power, extending such dependence beyond Meralco’s franchise area.
