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FEELING
that it is being pushed against the wall to take the
blame for high power rates in the country, particularly
in Metro Manila, government-run National Power Corp. (Napocor)
Monday belied accusations made in three print
advertisements that seemed to be favoring Manila
Electric Co. (Meralco).
“The
figures cited therein [referring to the ads] all but
place the blame on Napocor for the increased power rates
being charged by the distribution firm,” Napocor said in
a statement.
It added
that the rates Napocor charges its customers like
Meralco in the Luzon, Visayas and Mindanao grids are
uniform, under the company’s “one grid, one rate”
policy.
Napocor’s rates are approved by the Energy Regulatory
Commission (ERC) and have undergone the process of
application and public hearings before they were
approved. The present approved rate structure of Napocor
is the Time-of-Use (TOU), which prices electricity based
on the time of day it is used or required.
Meralco
buys electricity from three sources: from Napocor, its
own independent power producers (IPPs) and the Wholesale
Electricity Spot Market (WESM). Meralco sources about 40
percent of its electricity from National Power, and 80
percent of these are bought during peak hours, when
electricity rates are naturally high.
“We
still provide the cheapest electricity especially during
off-peak hours, at P1.84 per kilowatt-hour. The most
expensive electricity that Napocor provides is during
peak hours, at P6.06/kWh,” Napocor said.
Napocor
said if Meralco were 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 franchise area has a total demand of
roughly 4,600 megawatts (MW), while its IPPs have a
combine capacity of about 2,000 MW. Its contract with
them provides that Meralco should buy at least 83
percent of these combined capacities, which is about
1,660 MW.
The
difference of about 2,900 MW is provided for by
Meralco’s purchases from National Power and the WESM,
which it buys most of the time during peak hours, at a
more expensive rate.
Meralco,
at Monday’s hearing of the Joint Congressional Power
Commission, 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
Jesus P. Francisco, Meralco president.
Francisco denied that the company has been buying from
the electricity spot market deliberately during peak
periods when prices are high.
“Meralco
as a distribution utility acknowledges its obligation to
secure power at the least cost possible to benefit the
consumer. It must be explained that in the WESM, we have
to declare our requirements 24 hours ahead. So, by noon
of the previous day, we’re supposed to already take the
steps to identify where power would come from.”
Francisco added that their records will also show “that
it is not true that we’re buying from WESM only during
the peak periods. There’s an allocation for WESM over 24
hours and majority of our purchases are during the
off-peak periods.”
He
elaborated: “The problem of the industry is not because
we deliberately buy power at high prices. It is because
there are periods during the day when there is a
scarcity of reasonably-priced power,” he added.
He
explained that Meralco maximizes its purchases from
NPC’s special low-cost programs, such as the Economic
Zone rate, before it even utilizes its IPPs, such as
Quezon Power and First Gas.
According to Meralco’s website, in March 2008, the
overall cost of generation and transmission from the
company’s IPPs, which supplies about half of its power
needs, was P5.25 per kWh.
In
comparison, the combined generation and transmission
cost of its other suppliers was P6.37 per kWh.
The
utility also refuted claims that it charges the highest
residential distribution rates in the country.
Meralco
vice president Ivanna dela Peña said the company’s
socialized prices are skewed towards favoring small
power consumers. |
