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GOVERNMENT Service Insurance System (GSIS) president
Winston Garcia presented to Filipino business leaders
his formula in bringing down the cost of electricity in
areas covered by the Manila Electric Co. (Meralco).
He
anchored his proposal on the increase in the ratio of
power being purchased from the National Power Corp. (Napocor)
against independent power producers (IPPs).
But
while they basically supported Garcia’s idea, Philippine
Chamber of Commerce and Industry (PCCI) chairman Donald
Dee said several issues need to be threshed out to
determine if it would really work under the present
setup.
Garcia,
in his speech at the PCCI Energy Forum, said that at a
50-50 ratio of purchased power from Napocor and IPPs and
with the off-peak and peak rates combined, the
generation cost of Meralco will already go down by 16
percent to P4.08 per kilowatt-hour (kWh) from the
current P4.87/kWh.
If the
sharing is increased to 70 percent in favor of Napocor,
Garcia said the cost would be cut by 19 percent to
P3.93/kWh; and by 24 percent to P3.71/kWh if Meralco
will buy 100 percent from Napocor.
Meralco,
Garcia said, currently buys 1,242 gigawatt-hours (gWh)
from its three IPPs, 29 gWh from the Wholesale
electricity Spot Market and 90 gWh from Napocor.
Meralco’s three IPPs charge P4.44/kWh while Napocor’s
rate is P4.67/kWh.
However,
during off-peak hours, Napocor’s rates range from
P1.87/kWh to P2.719/kWh, while the IPPs’ rates are
constant.
“We
should increase immediately the power purchased from
Napocor from 35 percent to 70 percent, and evenly
distributed on peak and nonpeak hours,” said Garcia, who
tried but failed to wrest control of the Meralco
management.
Dee told
the BusinessMirror said that while the group agreed with
Garcia on this, they still need to thresh out certain
issues with Napocor first before they could push for it.
First,
Dee said they would find out in the contracts of the
IPPs how much they will charge as penalty if their
“take-or-pay” guarantee is not honored.
“We
don’t know yet if the cost will just be the same after
the penalty is computed,” he said.
Then,
Dee said, the rates to be charged by Napocor should be
competitive enough or else its debts would just balloon
further—with the burden falling on the shoulders of the
people.
“But
basically we are in agreement that Meralco should buy
more from [Napocor],” Dee said.
Garcia
also recommended a review of Meralco’s system loss,
pushing for serious efforts to curb it and then make it
transparent to the public.
He also
wants to put a stop to the passing on of the
increasingly expensive pension cost to consumers, and to
have the Meralco employee benefits and privileges
closely monitored and regulated by the Energy Regulatory
Commission.
The
company, he added, should have more transparency and
competitiveness in the procurement of goods and
services.
The
highly onerous IPP provisions, Garcia said, must be
scrapped, such as the take-or-pay, unused capacity,
transmission-line and fixed-operating fees, as they
violate the provisions of the Epira and the Meralco
franchise.
He said
there would be consumer savings of at least P21 billion
a year based on 2007 figures from these proposals. “And
have a competent, professional and independent
management team to implement all these recommendations,”
he added.
For the
shareholders, Garcia said Meralco must have a consistent
dividend policy equivalent to at least 50 percent of its
net profits every year. |
