ERC to review effect of $3.3-B natural gas deal

THE Energy Regulatory Commission (ERC) will review the impact of the $3.3-billion LNG (liquefied natural gas) deal on consumer prices.

In a statement on Monday, ERC Chairman Monalisa Dimalanta said that while «the review of the merger falls under the mandate of the PCC (Philippine Competition Commission),» her office «will review the effect, if any, on the present and future PSAs (power supply agreements) of Meralco and behavior of players in the WESM (Wholesale Electricity Spot Market) and retail market.»

A $3.3-billion deal was signed by Meralco PowerGen (MGen), Aboitiz Power and San Miguel Global Power Holdings Corp. (SMGP) earlier this month to jointly launch the country's «first and most expansive» LNG terminal.

Once fully operational, the LNG facility in Batangas province is expected to supply fuel for plants that are expected to generate more than 2,500 megawatts (MW) of electricity.

Under the deal, MGen and Aboitiz Power will jointly invest in two of SMGP's gas-fired power plants, the 1,278 MW Ilijan plant and a new 1,320 MW combined cycle power facility.

Dimalanta said the ERC partnered with the PCC to investigate allegations of anti-competitive practices in the power sector.

This initiative builds on the 2019 memorandum of agreement (MoA) between the two regulators to foster competition in the energy industry in response to concerns about power outages and corresponding increases in electricity prices.

The United Filipino Consumers and Commuters (UFCC) had alleged that the partnership of three business conglomerates effectively monopolizes the LNG market and allows them to dictate prices, leading to higher rates.

But Dimalanta said, «there has been a standing agreement for coordinated review since 2019. We just operationalized the agreement by setting up the joint inquiry last month. This synergy allows our respective agencies to better fulfill our mandates and serve the Filipino public.»