Meralco reconnects companies with self-generating facilities to the grid to bring down rates

By Paul A. Isla

THE Manila Electric Co. (Meralco), the country’s largest power distributor, is now targeting to increase its sales by bringing back industries that have self-generation facilities (SGFs) to get reconnected to the grid.

“By being able to encourage these industries with SGFs, we will be able to bring down rates as well,” Jesus Francisco, Meralco president and chief operating officer, told reporters at the sidelines of the Philippine Chamber of Commerce and Industry Energy Forum on Friday.

The Meralco official said the power distributor has encouraged industries like Mariwasa and other cement companies, among others, to get back or reconnected to the grid.

“We already encouraged many of them to go back to the grid. So we’re trying to address the power-quality issues for these industries not to regret reconnecting with us [Meralco] to get back to the grid,” said Francisco.

The Meralco official said for every kilowatt-hour Meralco gets these industries to them to consume from the grid will go to help making the cost of electricity lower for everybody.

“We’re selling to them under a variety of special rates, and since they are large consumers or customers they can actually avail themselves of the National Power Corp.’s [Napocor] Time-of-Use rates,” said Francisco.

The Meralco official earlier pointed out that the more industrialized the country becomes could help distribution utilities, especially for Meralco, in bringing system losses down.

“There are a lot of factors that contribute in bringing down system losses. The percentage of industrial sales, since industrial customers get power at a high voltage, can help bring system losses lower,” Francisco said.

Last year the Meralco official said their system loss was 9.65 percent.

Francisco said Meralco has estimated its technical loss to be only 6 percent or even below, so of the 9.65-percent system loss, 6 percentage points of that is technical and the 3.65 percentage points represents nontechnical loss (pilferage).

Bringing down the cap and the actual system loss, Francisco said, they will have to absorb anything that goes above the cap, so if the cap is brought down to 8.5 percent, that’s a full 1 percent below the present cap.

Francisco said for every 1 percent, it is equivalent to P1.3 billion in losses or expense to Meralco.

Francisco earlier said Meralco has always wanted to point out it is doing everything it can in reducing system losses. He explained that when Meralco go above the 9.5-percent cap set by the power-distribution code, the excess to the cap becomes a cost to the company.

For every percentage excess in the system loss cap, according to Francisco, it costs them probably billions at today’s cost of power.

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Meralco reconnects companies with self-generating facilities to the grid to bring down rates

THE Manila Electric Co. (Meralco), the country’s largest power distributor, is now targeting to increase its sales by bringing back industries that have self-generation facilities (SGFs) to get reconnected to the grid.

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