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By Euan Paulo C. Añonuevo, Reporter
State-owned National Power Corp. (Napocor) said
consumers in the franchise area of the Manila Electric Co. do not
feel its low power rates as Meralco is buying bulk of its
electricity supply from other expensive sources and at more
expensive hours at that.
During a hearing by the Joint Congressional
Power Commission, or PowerCom, at the Senate on Monday, Cyril del
Callar, the Napocor president, said they have implemented a number
of rate cuts that consumers are not fully enjoying as such cuts are
“pro rata” or dependent on how much Meralco buys from them.
“The answer lies in the blending of generation
rate. We only supply, based on the own paid advertisement of Meralco,
40 percent of their supply,” he said.
Meralco’s franchise area has a total demand of
roughly 4,600 megawatts. Its independent power producers (IPPs) have
a combined capacity of about 2,000 megawatts. Its contract with
these power producers provides that Meralco should buy at least 83
percent of the combined capacity, which is about 1,660 megawatts.
The difference of about 2,900 megawatts is provided for by
Meralco’s purchases from Napocor and the Wholesale Electricity
Spot Market (WESM).
Napocor said in a statement that other
distribution utilities and electric cooperatives in Luzon that
source all of their power requirements from it enjoy a much lower
rate, between P3.60 per kilowatt-hour to P3.90 per kilowatt-hour.
Such rate is possible because of the agency’s time-of-use rates (TOUs),
which peg electricity prices depending on the demand at a certain
time of day—either “peak or “off-peak.”
Meralco’s other sources provide varying rates.
From its contracted IPPs, the prices are the same, regardless if the
electricity is bought during peak or off-peak, at about P4.24 per
kilowatt-hour.
From the WESM, prices vary because of the
market’s volatility. During off-peak, prices in the spot market
are cheaper, ranging from a negative amount to zero. It spikes up
during peak hours, reaching sometimes P10 per kilowatt-hour.
“If Meralco is really serious in performing
its mandate, as contained in the Electric Power Industry Reform Act
[Epira], to provide electricity from the cheapest possible source,
then all the utility has to do is manage its purchasing mix from all
the three sources,” Napocor said.
Meralco’s purchasing behavior or load pattern
from all these sources, however, depends entirely on the utility. It
is purely a business decision on the part of Meralco as to when it
will buy electricity, at what time and at what price.
During the same hearing, the embattled Lopez
firm said the company is complying with its obligation to supply its
customers in the least-cost manner.
“As will be borne out by the records and as
can be seen from our website, we have sought to optimize the overall
cost of generation and transmission for our consumers. This has
resulted in the least cost for our consumers,” said Meralco
President Jesus Francisco.
He explained that Meralco maximizes its
purchases from Napocor’s special low-cost programs, such as the
Economic Zone rate, before it even utilizes its IPPs, such as Quezon
Power and First Gas.
Data from Meralco’s website show that in March
2008, the overall cost of generation and transmission from the
company’s IPPs, which supply about half of its power needs, was
P5.25 per kilowatt hour. In comparison, the combined generation and
transmission cost of its other suppliers was P6.37 per
kilowatt-hour.
The company also refuted claims that it charges
the highest residential distribution rates in the country. Meralco
Vice President Ivanna de la Peña said the company’s socialized
prices are skewed toward favoring small power consumers.
Its combined distribution, supply, and metering
charges to a household using 200 kilowatt-hours or less amount to
only P1.34 per kilowatt-hour. These households number more than
three million and account for three-fourths of all its residential
customers.
Francisco said Meralco has always been
transparent in all its dealings with “all the information on
Meralco’s rates, finances, and services are freely available on
its website, www.meralco.com.ph, or even at the Energy Regulatory
Commission.”
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