Meralco looks at reentering power generation biz
By Paul Anthony A. Isla
Reporter

THE country’s largest power distributor, Manila Electric Co. (Meralco), is now looking at reentering the power generation business, Manuel M. Lopez, the company chairman and chief executive, said Tuesday.
       In a press conference after Meralco’s stockholders’ meeting, Lopez said, “We have an investment with First Private Power already, and we are very attracted with the possibility of going back again in further generation investments.”
       Meralco president and chief operating officer Jesus P. Francisco said Meralco has an obligation to try to serve its captive customers at the best price possible.
       “So if there are options or opportunities that present itself to us, we would look at it as an option,” Francisco said.
       Lopez revealed that Meralco is looking at some assets of the National Power Corp. [Napocor] that are being privatized. The company also participated in some due diligence activities, particularly for the Tiwi-MakBan geothermal complex and also at some hydroelectric power plant packages.
       “And there are many different options that we can look at. But certainly the attractiveness of the power generation, considering the profits of the different generating companies, this is something that the board has already decided upon,” Lopez said. He added that it’s just a matter of which particular generating company Meralco would enter into, be it a greenfield or Psalm asset, or a joint venture.
       Lopez admitted that everything is still up in the air.
       “Yes, Meralco is charting an independent course,” Lopez said when asked if it would be partnering with First Gen in bidding for Napocor’s power plants.
       Francisco, on the other hand, said that it would definitely take a shorter time to takeover an existing power plant than to start with a greenfield power plant.
       In acquiring an existing power plant, Francisco said the winning bidder could actually take over the operation and management of a power plant at a specific time, once all the requirements of the Power Sector Assets and Liabilities Management Corp. (Psalm) are completed.
       “But in our case, I think the relevance of generation would also depend on the onset of open access, particularly on the competition —being nonregulated area, we can keep some of the profits as compared to being passed through now,” he said.
       “And unless the Energy Regulatory Commission provides incentives to distribution utilities, particularly for generation it really would still be a pass-through for us,” Francisco added.