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Gov’t urged to expedite approval of power supply deals

By Aerol John Pateña

April 30, 2019, 3:44 pm

<p>Meralco Chairman Manuel V. Pangilinan urges the government to expedite the approval of its power supply deals amid the current energy shortage in Luzon. <em>(PNA photo by Aerol John B. Patena) </em></p>

Meralco Chairman Manuel V. Pangilinan urges the government to expedite the approval of its power supply deals amid the current energy shortage in Luzon. (PNA photo by Aerol John B. Patena) 

MANILA -- The Manila Electric Company (Meralco) has urged the government to expedite the approval of its power supply deals amid the current energy shortage in Luzon.

“The fact is even if all approvals are given to us or procured, it will not happen in the next two to three years. It takes a while for any power plant to be built. I’m afraid, I will probably be criticized to say this, but this power issue is going to be with us for the next two to three years,” Meralco Chairman Manuel V. Pangilinan said in a press briefing last Monday.

"I will just urge the government to get their approval processes done as quickly as we can so that whatever power plants are in the burner can be implemented as soon as possible,” he added.

The Energy Regulatory Commission (ERC) is currently reviewing the 20-year power supply agreements (PSAs) of Meralco with seven power generation companies covering 3,551 megawatts or 90 percent of its power supply requirements.

These power generation firms are Redondo Peninsula Energy Incorporated, St. Raphael Power Generation Corporation, Atimonan One Energy Incorporated, MGen Panay Energy Development Corporation, Global Luzon Energy Development Corporation, Central Luzon Premiere Power Corporation, and Mariveles Power Generation Corporation.

The PSA applications were filed before the ERC in April 2016.

A petition was filed by consumer group Alyansa Para sa Bagong Pilipinas Inc. (ABP) in November 2016 before the Supreme Court to stop the ERC from approving the PSAs entered into by Meralco with the power generation firms as these allegedly did not undergo a competitive bidding process.

The ABP claimed in its petition that the ERC in issuing a resolution that extended the deadline for the start of the competitive bidding of power supply from October 2015 to April 2016 allowed Meralco to enter into PSAs with these companies.

The implementation of the PSAs will result in much higher electricity prices for Meralco subscribers within the next 20 years, the ABP alleged.

Pangilinan hopes the Supreme Court will be able to issue a decision on the matter at the soonest for Meralco to increase its power supply.

“The continuing Yellow and Red Alerts being experienced today may eventually lead to serious power supply shortage in the next few years unless immediate action is done to resolve the root cause of the problem, by adding more generating capacity and taking decisive action on the much-delayed construction of new power plants,” Pangilinan said.

Successive power interruptions hit the Luzon grid due to declining energy reserves as a result of unplanned outages that hit several power plants.

Meanwhile, Meralco’s core net income for the first quarter of 2019 increased by 14 percent to PHP5.6 billion compared to PHP4.92 billion in the same period last year.

Its reported net income was higher by 7 percent to PHP5.7 billion for the January to March period.

The growth in Meralco’s financial performance were driven by higher distribution revenue brought by the 2 percent growth in energy sales volume, positive distribution from Clark Electric Distribution Corporation (CEDC) following the settlement in 2018 of an unexpected claim by the Clark Development Corporation over the distribution revenues earned by CEDC from 2014 to 2018, and turnaround operating results of its retail electricity supply units. (PNA)

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