Semirara coal supply at risk by July 2027

Domestic coal supply could face disruptions by July 2027 unless the government resolves the dispute over Semirara's next operating contract, potentially putting further pressure on electricity costs, a consumer group warned.

The National Association of Electricity Consumers for Reforms (NASECORE) on Thursday urged the Department of Energy (DOE) to resolve the contested bidding requirements and ensure uninterrupted coal production before Semirara Mining and Power Corp.'s (SMPC) existing contract expires in July next year.

"Any award must protect the continuity of production," NASECORE said.

"If a new operator is selected, the DOE should require a credible transition plan covering lawful access to equipment and facilities, personnel, technical operations, safety, rehabilitation and domestic deliveries, with realistic milestones before the incumbent contract expires," it added.

SMPC currently operates the mine under Coal Operating Contract No. 5.

The DOE terminated the 2026 coal bidding round in September to reassess its award parameters following objections to the proposed requirements.

SMPC has challenged the rules, particularly the alleged requirement to surrender mining assets, raising questions over the legality and fairness of the selection process.

NASECORE, on the other hand, urged the DOE to clarify the legal basis of the disputed provisions under Presidential Decree No. 972 and the existing contract while ensuring that the bidding process remains competitive.

“Legitimate property rights must be respected; they must not, however, be confused with an automatic right to another operating contract,” the group said.

Apart from securing production continuity, NASECORE pressed the government to prioritize domestic coal requirements under the next contract, citing SMPC's 2025 annual report showing that 45.6 percent of its coal sales volume went to export markets.

It called for enforceable domestic supply commitments and transparent pricing arrangements that account for local demand and coal-quality requirements.

"Greater government revenues do not, by themselves, guarantee lower electricity costs for consumers," NASECORE said.

The group also cautioned against bidding qualifications that could favor the incumbent and discourage other technically and financially capable operators from participating.

"Qualification conditions drawn too narrowly around the incumbent’s unique operating history could effectively exclude other capable bidders," it said.

NASECORE maintained that bidders must demonstrate technical competence, financial capacity, operational readiness and compliance with mine safety and environmental standards.

It also sought an independent assessment of the mine's rehabilitation obligations to establish outstanding liabilities and prevent costs from being unfairly transferred to taxpayers or a succeeding operator.

The group urged the DOE to disclose the revised bidding rules and explain how the next operating contract would protect domestic coal supply, promote competition and deliver measurable benefits to electricity consumers.

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