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By Euan Paulo C. Añonuevo, Reporter
Giant utility Manila Electric Co.
(Meralco) is open to reducing the amount of power it sources from
its sister firms and take advantage of the lower rate being offered
by state-owned National Power Corp. (Napocor) as directed by
President Gloria Arroyo.
But the catch is that Napocor’s
rate does not come without conditions.
In a press conference Thursday,
Meralco President Jesus Francisco said the company is running
simulations on whether it would be feasible to adjust the amount of
power it sources from its suppliers in favor of Napocor, which is
offering to lower the cost of power it sells to the Lopez-owned
utility to P4.11 per kilowatt-hour.
“If the simulations show that
there will be savings for consumers, we will lower independent power
producers’ [IPP] share,” Francisco added.
Meralco’s contracted IPPs,
which include Lopez-controlled First Gen Corp., supply about half of
the electricity it distributes to its customers in Metro Manila and
outlying provinces. The company also buys roughly around a tenth of
its requirements from the Wholesale Electricity Spot Market and the
rest from Napocor.
The power rates of Meralco’s
suppliers vary per month depending on foreign exchange and fuel
costs as well as supply of and demand for electricity. These are
then passed on to consumers, making up roughly two-thirds of
electricity bills.
First Gas Corp., another sister
company of Meralco, has turned the tables on the government, which
had faulted the utility for the prohibitive cost of electricity in
the country.
During Thursday’s hearing by
the House Committee on Energy headed by Rep. Juan Miguel Arroyo of
Pampanga, First Gas executives challenged the government to muster
political will in lowering the price of electricity by removing
royalty tax on natural gas.
Richard Tantoco, chief operating
officer of First Gas, told panel member Rep. Teofisto Guingona 3rd
of Bukidnon that the government is collecting P1.79 per
kilowatt-hour from natural gas or a total of P36.90 billion a year
from First Gas and another power plant.
He and other company officials
said their computation showed that consumers would save an estimated
P200 from their monthly billings if the government scrapped the
royalty tax.
Cyril del Callar, Napocor
president, earlier told another congressional hearing that the
government-run corporation has implemented a number of cuts in its
power rates. These cuts, he said, are not fully felt in Meralco’s
franchise area as its rates are “pro rata” or dependent on how
much is sourced by the utility.
Fransisco said Napocor’s
proposed rate of P4.11 per kilowatt-hour is not as simple as getting
a flat rate as it has to satisfy a number of requirements imposed by
the flat rate.
These requirements include a
75-percent load factor or power efficiency and a minimum demand of
1,400 megawatts during off-peak or on periods of low electricity
use.
With these two requirements
alone, Fransisco said, Meralco would have to study if sourcing more
from the state power-generating firm at the pegged rate would be
beneficial to its customers.
President Arroyo had ordered
Napocor to offer the rate of P4.11 per kilowatt-hour, the same rate
it charges electric cooperatives in Luzon, to Meralco in an effort
to find a solution to the country’s exorbitant electricity rates,
which are second only to Japan in the region.
The President issued the order
during the Philippine Energy Summit held in February, where she
scored the Lopez-controlled distribution utility for its high
electricity rates.
During the hearing by the House
energy committee, Rep. Arroyo accused Tantoco of “muddling” the
issue on cheaper electricity and “passing the buck to the
government.”
Cavite Rep. Crispin Remulla, the
vice chairman of the committee, told reporters that there are at
least 17 independent power producers contracted by Napocor whose
capacities to generate the required amount of energy are doubted.
--With Sammy Martin
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