Gov’t urged to resolve power rate issue

Power generation firms are urging the government to resolve the power rate hike issue before the summer months.

“Some generation firms can last until the summer, others cannot. The sooner all these issues are resolved, the better,” said Aboitiz Power SVP for power marketing and trading Luis Miguel Aboitiz in a briefing in Makati.

Aboitiz also heads the Philippine Independent Power Producers Association (Pippa).

At present, there is sufficient energy supply, he said.  “Prices are relatively stable and there is more than enough supply. I don’t see any problem. Generators continue to supply power to Meralco,” Aboitiz added.

He said that if the combination of high electricity demand, tight supply and the Malampaya gas platform shutdown (which made three plants use more expensive fuel) had happened in the summer months, the result could have been worse than the P4.15/kWh spike in power cost that Manila Electric Co. was supposed to have passed on to consumers starting December.

The summer months starting March are drier, with baseload hydro power plants performing below designed capacity.

He expressed optimism that the suspension of Meralco’s power rate hike collection “might resolve itself” soon.

“There are two issues here. (First is) whether the payment is full or not, and the second is timing. If you are owed revenue but given money one year from now, what are you going to use,” Aboitiz said.

Foreign-led firms, Aboitiz said, who have experienced similar conditions in other markets, are watching how the events will unfold in the Philippines. He declined to hazard a guess as to what these foreign companies would do. However, he said, “a foreign generator, if something goes wrong in the Philippines, can shut down his (generation plant) and leave. But the locals, we can’t exactly leave.”

The real solution, Aboitiz said, was more power capacity. “If we had more capacity, this never would have happened,” he said.

Meralco officials separately said that having more power generation plants to buy power from was the “long-term solution.”

Most power generation firms are part of Pippa, which has 28 members. Its member-firms collectively supply about 80 percent of the total installed capacity in the country.

In December 2013, the Supreme Court issued a temporary restraining order stopping Meralco from collecting the power cost increase that was supposed to have been staggered through the months of December 2013, February 2014 and March 2014. The Energy Regulatory Commission also conducted an investigation on allegations of collusion.