David Tan, the founding president of the Philippine Independent Power Producers Association (PIPPA), is blaming the Manila Electric Company (Meralco) for the electricity mess, saying that the real story behind the electricity price shock is Meralco’s “failure to properly manage its contracted generating companies to bring least cost power to its consumers.”
According to Tan, Meralco was forced during the Malampaya shutdown to source more of its power requirements from WESM amid the then price volality because it had failed to source or enter into supply contracts with such available facilities as San Miguel’s 345 MW plant in San Roque, GN Power’s 600 MW coal plant in Mariveles, and CBK Power Co.’s pump hydro in Laguna.
What Tan is not saying is that various factors have prevented Meralco from tapping these power facilities during the abnormal supply situation.
CBK cannot sell to Meralco because as a frequency-regulating power plant, it sells all its electricity to the Power Sector Assets and Liabilities Management Corp. (PSALM) and the National Grid Corp. of the Philippines (NGCP).
Meralco had approached GN Power but it had already sold all of its capacity elsewhere. San Roque did not entertain this distribution utility (DU)’s offer to buy power.
Thus, it was inappropriate and incorrect for Tan to deduce from the facts that Meralco never had any intention of signing up these gencos as a way to reduce its dependence on WESM at that time of runaway prices.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
These, however, all seem to be water under the bridge. The Energy Regulatory Commission (ERC) has already ordered WESM operator Philippine Electricity Market Corp. (PEMC) to re-run or recompute the spot market rates during the Malampaya shutdown.
In its ruling, the ERC voided the WESM prices during the Oct. 26-Dec. 25 period and ordered the imposition of regulated prices, because “the WESM prices during the November and December 2013 supply months could not qualify as reasonable, rational and competitive,” owing to the confluence of factors accompanying the tight market supply situation.
Incidentally, it was Meralco that had asked ERC to do a WESM re-run or re-computation of rates to find out if WESM prices during the Malampaya shutdown were reasonable and rational.
Meralco had actually done a number of measures to beef up its supply in anticipation of the traditional peak-demand summer months. As a result, Meralco was able to slash – rather than jack up – the electricity bills of its 5.4-million customers this May.
These pro-consumer moves include: securing interim power supply agreements (IPSAs) with several gencos for extra power these tight supply months of May and June; backing the Department of Energy (DOE)’s Interruptible Load Program (ILP), in which big establishments have committed to disengage from Meralco’s system and use their own back-up generation sets if and when needed to stabilize power supply in the Luzon Grid, and calling on one of its contracted suppliers to put off its scheduled maintenance shutdown during this period so as not to exacerbate the already tight power situation.
Tan also faulted Meralco for engaging in the power-generation business through its subsidiary PowerGen, which has sewed up joint ventures with various foreign and local groups on coal-fired and Liquified Natural Gas (LNG) power projects.
Tan should in fact encourage other big-time investors to take their cue from Meralco and similarly funnel their cash into power-generation ventures that would help stabilize the country’s electricity supply in the long run.
The DOE’s energy supply forecast points to a supply shortfall in a year or two in the absence of new power plants that would augment supply by then. Tan should be commending Meralco and urging other major investors to follow suit for wanting to be part of the solution to the power mess by investing its money in new facilities.
Preview of things to come
Eyebrows were raised over, and P-Noy’s immediate acceptance, of the resignation, of Margie Juico as chairperson of the Philippine Charity Sweepstakes Office (PCSO).
Juico simply issued a motherhood reason by saying that she wants to rest and that at 65, she’s already retirable.
Sources, however, at the Wack Wack Golf and Country Club have a different story. The ouster of Margie was an offshoot of the two-month suspension from Wack Wack of Interior and Local Governments Secretary Mar Roxas. Philip, Margie’s husband, is chairman of Wack Wack Golf and Country Club and delivered the deciding vote that resulted in the suspension of Roxas from the club for berating club staff members. But this is getting ahead of the story.
Before the Wack Wack board of directors met to decide the issue, Mar reportedly called Popoy Juico and requested him to “sanitize” the incident. Mar claimed he had secured affidavits in which the involved staff allegedly retracted their complaints.
Popoy said he could not sanitize the issue, and that in the interest of the club, Mar should just admit his fault.
The board voted 3-3 and one abstention. After evaluating the facts and talking to the staff involved, Popoy broke the tie. He voted for Mar’s suspension.
Upon hearing the verdict, Mar allegedly called up Popoy and said: “Akala ko, hawak mo yung board? Bakit nagkaganyan?” Popoy retorted: “Mga independent minded sila. I cannot herd them. Si President P-Noy ba ay hawak ang pag-iisip ni DOJ Secretary De Lima at Ombudsman Morales?”
Mar was quoted as saying: “Popoy must be for Jojo Binay. He who is not with me is against me.”
For comments, e-mail at philstarhiddenagenda@yahoo.com
