Who is P4P stooging for?

TO begin with, what is P4P? And why does it merit attention? For context, there is this recent partnership forged by the country’s three leading power companies — Meralco PowerGen Corp. (MGen), Aboitiz Power Corp. (AboitizPower) and San Miguel Global Power Holdings Corp. (SMGP) — to establish an integrated liquefied natural gas (LNG) facility in Batangas. Economic analysts view the merger as a positive development in line with the current administration’s thrust of boldly expanding the economy.

President Ferdinand “Bongbong” Marcos Jr.’s efforts in this regard have started bearing fruit, with significant foreign investments already on the drawing board. Improvement of power facilities has necessarily become an imperative that urgently needs to be addressed as among top priority areas for development. Therefore, credit must accrue to MGen, AboitizPower and SMGP for their prompt response to the urgency.

And then suddenly comes around this certain Power for the People Coalition (P4P) raising hell, so to speak, against the LNG power merger.

In a statement made available to the media, P4P convenor Gerry Arances claimed that “once the merger and acquisition of the LNG [power plants] are completed, it will result in the hiking of electricity rates that will severely affect electric consumers.”

Arances added that LNG is prone to price increases as it is vulnerable to market forces globally.

But that’s all there is to the claim, a motherhood statement at best, with no backup of hard facts and figures.

In stark contrast is the glaring reality of the energy sector of the country’s economy.

It should come naturally that as the national economy expands, energy demand will be growing at an even faster rate. Industry estimates show that power demand in the country is expected to grow by 6.6 percent from last year’s 17,000 megawatts (MW). The partnership forged by MGen, AboitizPower and SMGP to establish the integrated LNG facility certainly addresses the imminent power demand.

Had P4P only made a serious enough inquiry, it would not have arrived at such sweeping erroneous conclusions on the MGen-AboitizSMGP LNG merger. Available figures show the collaboration is worth around P168 billion and is expected to augment the country’s power supply with over 2,500 MW of generation capacity once fully operational.

Under the deal, MGen and AboitizPower will invest in SMGP’s 1,278MW Ilijan gas-fired power plant and a new 1,320-MW facility slated for completion by the end of the year.

The three companies will then acquire nearly 100 percent of the LNG import and regasification terminal owned by Linseed Field Power Corp., a local unit of global infrastructure firm Atlantic, Gulf & Pacific Co., that received the country’s first LNG cargo delivery in April 2023.

It so happens that the joint venture agreement among the three conglomerates takes place just as Meralco awarded 2.4 gigawatts worth of new power supply agreements (PSAs) to two plants owned by Aboitiz and SMGP. In the view of P4P, Meralco will acquire a 40-percent stake in the Ilijan LNG Power Plant and Excellent Energy Resources LNG Power Plant through the deal and this would effectively make Meralco owner of the power plants.

But then again, that would be placing the cart before the horse, so to speak. All speculation, at best.

In the first place, Meralco has publicly assured transparency in its conduct of business — in full compliance with all rules and regulations issued by the Energy Regulatory Commission and Department of Energy (DoE).

P4P has no reason whatsoever to raise concern in this regard. Meralco takes pride in being an open book through and through.

The Competitive Selection Process (CSP) bidding to award the PSA to SGMP was a successful endeavor and was done in complete accordance with the DoE circular requiring distribution utilities to procure power through CSP. The CSP was administered by the third-party bids and awards committee that was constituted pursuant to the DoE circular.

P4P has been criticizing all government programs without offering any concrete solution. Why the constant harping on power energy programs, while being completely silent on other consumer issues? Suspicion is rife about certain groups that have lost out to the MGen-AboitizPower-SMGP conglomerate, feverishly funding ostensible consumer coalitions that are actually shameless, shameful rent-a-crowd entities to make noise in a vain effort to still defeat what has already been accomplished as a matter of supreme national interest.

The path-breaking venture of the three conglomerates is in line with the current administration’s energy security plan.

As President Marcos continues to entice foreign companies to invest in the country, with his recent trips successfully attracting investments in manufacturing, energy demand growth will be even faster.

Apart from transforming the energy landscape of the Philippines, the LNG partnership of MGen, SMGP and AboitizPower symbolizes a milestone alliance among major players in the energy industry toward a more sustainable future.

LNG is the cleanest of all fossil fuels and represents vital national infrastructure that is needed to maintain and enhance the country’s energy security when the Malampaya gas field is eventually depleted.

The Marcos administration indicated that having a bridge fuel like LNG is the most critical part of the country’s plans for the future.

Under the Philippine Energy Plan, the DoE aims to increase the share of LNG in the country’s power mix to 26 percent by 2040, as it is seen as “a suitable transition fuel.”

That word “transition” should betray the element of chance in the undertaking. At this stage, it really is a kind of venture in uncharted waters. And yet, from the way P4P places the issue, it is as if it is a case of all gain, no loss for the merger of conglomerates. It is not quite so. There are lots of intangibles that by dint of circumstances could turn fortune into misfortune. For instance, the continuously worsening tension between the Philippines and China over their dispute in the South China Sea.

What if in the middle of the Batangas LNG power construction project, the Sino-Philippine war breaks out? The P168 billion outlay for the undertaking could be so much water down the drain.

For sure, the MGen-AboitizPower-SMGP merger, in its earnest desire to ease things up for Filipinos in facing the coming challenges of the times, intends to make energy truly affordable for the consuming public.

It is really a pity that for such a noble intention, what the MGen-AboitizPower-SMGP merger gets is pillory by selfserving socialist pretenders.